Taiwan's export orders surged 2% in September

Here's what boosted this growth.

According to Bank of America Merrill Lynch, Taiwan's September export orders (an indication of potential shipments in the next 1-3 months) rose by 2.0% yoy, vs. 0.5% yoy in August, surprising the market and its more bullish forecast on the upside. In Jan-Sept, export orders fell 0.8% yoy.

With a lead time of about 1-3 months, export orders are usually the canary in the mineshaft for the upcoming exports trend in Taiwan and the global economy.

Here's more from BofAML:

In September, we saw very promising double-digit growth in orders from Europe (+15.6% yoy in Sept vs. 1.0% in August), still robust orders from the US (+7.0% yoy in Sept vs. 9.1% last month) as well as strong growth in orders for information and communication products (+16.2% vs. +4.7% yoy in August).

But this was offset by a slump in export orders from HK and China (-6.1% yoy vs. 0.1% yoy in August).

September marks the first month, since December last year, where US (accounting for 25.6% of total Sept export orders) surpassed HK and China (24.9%) as the largest export orders destination.

Coupled with the doubledigit growth in orders from Europe, the improvement appears to signify the onset of a recovery in the developed economies.

However, the weaker-thanexpected September exports released earlier this month illustrate that the data across the board remain mixed, hinting a recovery path that will continue to be quite bumpy going forward.

In particular, the US demand in the next two months may be affected by the recent two-week government shutdown.