The industrial output and export orders in Taiwan plummeted to very low in November 2008 primarily due to weak overseas demand and global economic slowdown.
The Ministry of Economic Affairs states that Taiwan's industrial production and export orders fell tremendously during November 2008, as reported by Bloomberg.
Export orders declined by 28.51% during November 2008 from a year earlier (November 2007). Hong Kong and China based orders slumped 45.38% from a year earlier (November 2007), sliding further from 22.84% during October 2008. The US, second largest market for Taiwan, based orders shrank 29.29%. But the export orders for tobacco products, beverages and foodstuffs increased by almost 36.96% coupled with a 32.14% rise in vegetable and animal products.
The main reason for the decline in export orders is the economic downturn especially in the US and China as both of them are the largest export markets for Taiwan's products. Because of the economic downturn, the sales of main exporting goods like telephones, computer chips and laptops reduced tremendously.
In spite of the decreasing value of the Taiwanese currency against other currencies of the world, the export sector is failing to perform well or register growth. One important reason for this is consumers are feeling hesitant to buy anything because of instability in commodity and currency prices. Also, the extreme condition of the credit market has affected the exports from the country.
The industry experts have also claimed that the export orders will record annual decline of double-digits in next few months because of the threat of worldwide recession hitting the international demand for the island export products. Further, experts have predicted fall of 25.4% in export orders in the next two months.
Further, the fall in export orders has led to job cuts in the country as firms are facing losses because of low demand worldwide. Particularly, the electronic market is laying off workers to recover losses.
According to a Research Analyst at RNCOS "The worldwide recession is severely affecting the export industry in Taiwan. Further, more reduction in country's exports in near future is pointing that export orders will have to fight hard to remain positive and active. Also, unemployment is on rise because of sluggish trade."
