Taiwan January export orders shrink the most in nearly seven years

Taiwan's export orders in January fell by their steepest in nearly seven years, amid fears the coronavirus outbreak could hit global demand for electronics.

Orders for the month had been expected to fall from a year earlier because the week-long lunar New Year holiday fell in January this year. But the 12.8% fall to $35.31 billion was considerably worse than the median forecast of 9% in a Reuters poll of economists.

The data from Taiwan's Ministry of Economic Affairs showed the largest monthly decline since February 2013.

December orders rose 0.9% from a year earlier, their first growth for the first time in 14 months thanks to a pick-up in global electronics demand amid easing trade tensions between the United States and China.

Huang Yu-ling, director of the ministry's statistics agency, said the coronavirus outbreak could have a short-term impact on production and shipments and hit orders in the first quarter.

"First-quarter order could be lowered. Whether we would still see positive growth depends on the outbreak development," Huang said. "There are many uncertainties over the outbreak."

The ministry did not give a forecast for orders in the quarter, but Huang said they could drop $3-3.5 billion in February, citing a survey of Taiwan manufacturers.

Exports for Taiwan's manufacturers, a key part of the global supply chain for tech giants such as Apple and Huawei [HWT.UL], have been hit by both trade war disruptions and sluggish global demand for hi-tech gadgets.

The ministry expects February export orders to rise between 9.7% and 14.9% from a year earlier, when the lunar New Year fell during that month.

It said rising demand for new technologies, including fifth-generation telecommunications (5G) and artificial intelligence, will help boost sales in the coming months.

Taiwan last week lowered its 2020 economic growth estimate to 2.37%, citing possible impact of the coronavirus outbreak on its export-reliant economy.

In response, the Taiwan government planned a T$60 billion ($2 billion) package to help cushion the impact, offering loans to small businesses and even vouchers to spend on food at night markets.

January orders from the United States slipped 11.5% from a year earlier, compared with December's 8.8% decline. Orders from China fell 11.1% versus 5.6% growth the previous month. European orders dropped 13.8% while those from Japan fell 15.4%.

(Reporting by Roger Tung and Yimou Lee; Editing by Peter Graff)