Taiwan continues to suffer from the yearly contraction in export orders even though smartphone sales have been better than expected
Taiwan export orders contracted by 4.9% year on year in September after contracting by 4.6% in the previous month. It was the eleventh consecutive contraction in a row.
Smartphone sales can only do so much
Smartphone related equipment sales fell by 1% this month in Taiwan, which is less than what they fell by last month. This has somewhat helped overall export orders on a monthly basis grow by $5.479 billion in September, which is higher than the monthly growth of $4.182 billion seen in September 2018.
But can this trend last? Given that the sales of new smartphones and related equipment begins to dull after three months, Taiwan's export orders monthly growth might have reached their peak in September. We don't expect a repeat of such strong monthly growth in October 2019.
Therefore, it is quite likely, Taiwan's export orders will continue to contract on a year-on-year basis, which will, in turn, put negative pressure on industrial production and the economy after this round of smartphone sales fades.
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