Taiwan's January export orders dropped 10.1%

US orders fell sharply.

According to DBS, Taiwan's export orders for January came in weaker than expected at -2.8% YoY (consensus: 1.3%) . On the MoM (sa) basis, export orders fell -10.1% in Jan14, reversing the earlier gains accumulated in Sep-Dec13 (+12.5%).

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A closer look shows that the drop in orders was across all the product categories and across all the markets, suggesting that some specific factors should have been at play.

The recent cold weather in the US may have played a role in exaggerating the data weakness. Amongst the major export markets, orders from the US fell especially sharply in January, by -10.5% MoM sa. Meanwhile, orders from China and Hong Kong also decreased notably by -5.1% MoM sa.

The temporary factory closures in China during the Lunar New Year period should have caused distortion. Note that the LNY holiday began in end-January this year and covered early-February. This increases the complication of stripping out seasonal factors.

To tell the true picture of export performance, it is better to wait for data in the full month of February and make comparisons based on the combination of Jan-Feb data.