TAIPEI: November export orders from Taiwan saw their sharpest contraction since the height of the financial crisis, in a portend for the health of the global economy.
Taiwan is a global supplier of electronics, in particular state-of-the-art semiconductors, and the drop off in orders adds to evidence that demand for technology products is weakening across the globe.
Orders from overseas dropped 23% in November, according to data released by the economics ministry on Tuesday, the biggest fall since March 2009 when the world was being battered by the financial crisis.
The plunge was much worse than the near 13% drop economists surveyed by Bloomberg News had forecast.
Global sentiment has been hit by inflation and central bank interest rate hikes as well as concerns over the health of China’s economy.
The “baseline” forecast from Oxford Economics “now anticipates a global recession starting in Q4 2022 and comprising three straight quarters of negative per capita world GDP growth”, said a note from the advisory firm.
South Korea and China also reported forecast-beating falls in exports last month.
Global recession concerns are also being heightened by China’s abrupt decision to cancel its strict zero-Covid policy.
Nearly three years of strict lockdowns and a strategy of stamping out any infections had taken a toll on the world’s second largest economy and deepened global supply chain issues.
The switch to living alongside the coronavirus should see China eventually reopen to the world, helping to revive growth both in the country and globally.
But the manufacturing hub is likely to first go through a series of painful months as the coronavirus sweeps through the world’s most populous nation, impacting productivity and generating further supply chain disruptions.
Many of Taiwan’s top technology companies have huge factories in China, including Foxconn, which builds a vast array of electronic goods from iPhones to laptops and games consoles.