Taiwan – May export orders
Orders data continue to suggest that Taiwan's headline export growth slows towards zero in the next 3-6 months. That probably represents a best case outcome for export data for the rest of the region.
Export orders ticked up in May, but only enough partly to reverse the sharp fall in April. As a result, the smoothed average in YoY growth slowed further to 3% last month. That indicates that Taiwan's headline export growth will be down to zero in the next 3-6 months, consistent with the message from the equity market.
The slowdown since April has been led by China orders, and so a further bounce is possible in June and perhaps July as the Covid-19 lockdown in Shanghai ends. Given developments in the rest of the world, it does seem reasonable to assume that any rebound in demand from China into Q3 will be offset by weaker orders from the EU and US. To be clear though, there is no sign of a big downturn in demand from the advanced economies in the May orders data.
