(Adds details on orders from key markets, analyst quotes)
By Jeanny Kao
TAIPEI, April 23 (Reuters) - Taiwan's export orders fell 24.29 percent in March, their sixth straight month of declines, but the drop was not as severe as analysts expected, suggesting a deep slump in global consumer demand may be moderating.
The decline was also less than a 33 percent drop in the first two months of the year, in another tentative sign that the ailing world economy may be slowly turning around.
A global recovery hinges largely on when the world's consumers will begin spending again.
Taiwan's March export orders, seen as a key barometer of global demand for tech products, fell to $23.94 billion from $31.62 billion a year ago, government data showed on Thursday.
But the drop was not as bad as the 27.5 percent decline that analysts polled by Reuters had expected.
"The order figure far exceeded market expectations. Solid demand from China helped, but it was mainly due to stronger demand in the U.S. and European markets," said analyst Anita Hsu at Masterlink Securities.
"We are expecting the slide of export orders to continue to narrow in the second quarter, as U.S. buyers re-stock their inventories ahead of the peak (shopping) season in the fourth quarter. We recently raised our forecast for Taiwan's Q2 GDP to a 6 percent fall from the previous 8 percent slide."
March export orders from China and Hong Kong, Taiwan's biggest market, fell 29.38 percent from year-ago levels, while orders from the United States, the island's No.2 market, fell 23.43 percent. Orders from the EU fell 22.9 percent.
Electronics orders fell 16.6 percent, moderating from February.
Taiwan's AU Optronics <2409.TW>, the world's No.3 maker of LCD panels used in flat-screen TVs, on Thursday raised its capital expenditure forecast by up to 20 percent, igniting hopes that the worst of the tech downturn could be over.
AU supplies top brands such as Dell Inc
Industrial output data, which was released at the same time as the export orders report, also provided some encouraging signs, though the road to recovery is likely to be a long one.
March industrial output fell 26.03 percent from a year earlier, its seventh straight month of declines, but the rate of decline was not as severe as the 31.9 percent analysts had expected, and was an improvement from the 27.23 percent drop in February.
Taiwan's export orders have been slumping since October as recession-hit consumers and companies in key export markets like the United States and Europe cut back on their discretionary spending.
The island's orders typically offer some hints to where Asia's exports are headed in coming weeks, although its heavy reliance on the cyclical tech sector has made Taiwan even more vulnerable to the global downturn than its neighbours such as South Korea, which has a more diversified economy.
"You can be optimistic that the first quarter figures give us some idea as to how bad the downturn is going to be, but if we're talking about any possible recovery, that's possibly a story for 2010 or even 2011," said economist Joseph Lau at Credit Suisse.
For a graphic on Taiwan's recent export order trend, click http://graphics.thomsonreuters.com/apr09/TW_EXPORD0409.jpg
LINKS: For table of orders...............[ID:nTP352752] For analyst comments on export orders............[ID:nTP253877] For stories on global crisis affects Asia........[ID:nSP457970] For a graphic on Taiwan export orders and exports from China and South Korea, see: https://customers.reuters.com/d/graphics/TW_EPXGRTH0309.gif (Editing by Kim Coghill)