TAIPEI (Reuters) – Taiwan’s export orders contracted at the worst rate in more than a decade in November, hit by a plunge in China demand and generally weaker global consumer spending because of inflation and interest rate hikes.
The island’s export orders last month, a bellwether for global technology demand, were 23.4% lower than a year earlier at $50.14 billion, the Ministry of Economic Affairs said on Tuesday. That was higher than analysts’ expectations of an 11.2% decline.
November’s drop – the steepest since March 2009, when the fall was 24.3% – followed October’s annual contraction of 6.3%. November was the third month to show an annual drop.
Orders for telecoms products plummeted 30.5% from a year earlier because of weaker consumer demand especially in China because of COVID controls, but also came off a high base, the ministry said.
Orders for electronic products fell 15.2%, though the decline was offset by demand for chips for high-performance computing, 5G and automobiles, it added.
While semiconductor demand and stockpiling ahead of January’s Lunar New Year holiday in East Asia would help orders, there were also big uncertainties ahead, including the rapid spread of COVID-19 in China after the country lifted controls, it added.
The ministry added that it expected export orders this month to be lower than in December 2021 by between 27.8% and 30.8%.
Taiwanese firms, such as Taiwan Semiconductor Manufacturing Co Ltd, are major suppliers to Apple Inc (NASDAQ:), Qualcomm (NASDAQ:) Inc and other global tech companies.
Taiwan’s November orders from China nosedived 37.3% from a year earlier, versus October’s annual fall of 26.7%. Month-on-month orders from China dropped 4.1%.
China this month began easing its stringent zero-COVID approach that had led to widespread public frustration with lockdowns and damage to the world’s second-largest economy, but is now dealing with a rapid rise in cases.
Taiwan’s orders from the United States fell 16.7% from a year earlier, compared with a rise of 1.2% the previous month.
Export orders from Europe dropped 26.3%, versus October’s annual rise of 4.3%. However, orders from Japan expanded 5%.