Taiwan export orders drop in February

Kaohsiung port in Taiwan. The country’s export orders last month fell 2.7% from a year earlier to $29.89bn.

Reuters/TaipeiTaiwan’s export orders in February contracted from a year earlier, contrary to expectations, but strength in orders for the island’s bellwether technology goods indicate last month’s drop may be a one-off. Technology orders were up 6.8% in February from a year ago and rose nearly 14% in the first two months of the year, driven by demand for smartphone-related products, the Ministry of Economics Affairs said. Although the number of work-days last month was reduced by the Lunar New Year holiday, “orders for electronic products were growing in February,” said Tony Phoo, a senior economist with Standard Chartered. Total export orders last month fell 2.7% from a year earlier to $29.89bn. A Reuters poll had forecast for a 4.95% increase to follow January’s expansion of 8.1%. Taken together, orders were up 3.2% for the first two months of the year, the ministry said. The value of total orders fell for the second straight month. The ministry said falling prices for oil and raw materials brought down the nominal value of orders. Last month’s orders were also affected by Lunar New Year, which fell in February, but at the end of January in 2014, leaving fewer working days this February. Taiwan’s export orders are a leading indicator of demand for global technology goods. A lot of the final exports are processed through mainland China, where Taiwanese tech companies operate factories. Demand for Apple Inc’s latest iPhone models pushed the value of Taiwan’s export orders to a record last year. Catcher Technology Co, which makes casings for smartphones and laptops, including Apple gadgets, reported record net profit last year and it is already 65% ahead in revenue in the first two months of this year compared to the same period a year ago. Meanwhile, sales at bellwether TSMC, the world’s biggest contract chipmaker, are up 52% for the first two months this year.  Taiwan’s trade-driven economy remains on solid footing so long as economic prospects in the US, a big buyer of tech gadgets, stay upbeat. On Thursday, Taiwan’s central bank will hold its quarterly policy meeting. A Reuters poll expects no change in rates.