COVID-19 Export orders fall most in seven years

COVID-19 Export orders fall most in seven years

Reference: Taipei Times

https://www.taipeitimes.com/News/biz/archives/2020/02/21/2003731339

THE ‘WEAK SEASON’: Electronics orders were down a ‘mild’ 1.3 percent last month, while optoelectronics fell 18.8 percent and might drop further due to virus disruptions

• By Natasha Li / Staff reporter

Export orders last month dropped by 12.8 percent to US$35.31 billion, the biggest annual decline in seven years, the Ministry of Economic Affairs said yesterday, blaming the decrease to slipping orders for information and communications technology (ICT) products.

Following a short-lived recovery in December last year, export orders for ICT products contracted last month by 17 percent year-on-year to US$9.7 billion due to declining orders of smartphones, laptops and servers.

“We also have to take into account that there were six fewer working days last month [than in January last year] due to the Lunar New Year holiday,” Department of Statistics Director Huang Yu-ling (黃于玲) told a news conference in Taipei.

As more than 90 percent of ICT products are produced overseas, mainly in China, the COVID-19 outbreak might further affect production and undercut orders this month, she said.

“We expect the outbreak to affect between US$3 billion and US$3.5 billion of export orders this month,” Huang said, adding that about 80 percent of that amount would come from orders of ICT products.

Orders for electronics, which make up nearly one-third of the nation’s overall export orders, last month posted a relatively mild decline of 1.3 percent to US$10.3 billion, ministry data showed.

“The market for consumer electronics has entered a traditionally weak season, resulting in a smaller number of orders for suppliers,” Huang said.

Nonetheless, growing demand for foundry services and ICs propelled by upcoming 5G deployments helped cushion the fall in electronics orders, she said.

Orders of optoelectronics last month plummeted 18.8 percent to US$1.54 billion and the value might drop further this month due to supply chain disruptions as a result of the outbreak in China, Huang said, citing a government survey of optoelectronics makers.

In non-tech industries, export orders of base metals products; machinery equipment; rubber and plastic products; and chemicals all fell last month amid negative global market sentiment, the data showed.

However, those industries are expected to show annual growth in orders of between 9.7 percent and 14.9 percent this month due to a relatively low comparison base, Huang said.

To assist disease-affected manufacturers, the ministry has proposed budgeting an additional NT$3.47 billion (US$114.7 million) in funds, Industrial Development Bureau Director-General Richard Leu (呂正華) said.

The ministry has also looked at expanding the criteria for firms to be considered eligible to participate in government programs encouraging investment in the nation, he said.

Similar to a program aimed at assisting small and medium-sized enterprises initiated last week, the ministry has proposed an interest rate reduction of 1.06 percent for loans to local manufacturers and plans to allocate about NT$946 million to subsidize their interest payments, he added.

“We would also subsidize manufacturers that seek to sharpen their competitive edge through investment in innovation,” Leu said, adding that free courses would also be offered to companies’ employees.