TAIPEI: Taiwan's export orders fell by a lower-than-expected 24.29 percent in March, their sixth straight month of declines, but the drop was not as severe as analysts expected, suggesting a deep slump in global consumer demand may be moderating.

The decline was also less than a 33 percent drop in the first two months of the year, in another tentative sign that the ailing world economy may be slowly turning around.

A global recovery hinges largely on when the world's consumers will begin spending again.

Taiwan's March export orders, seen as a key barometer of global demand for tech products, fell to $23.94 billion from $31.62 billion a year ago, government data showed yesterday.

But the drop was not as bad as the 27.5 percent decline that analysts polled by Reuters had expected.

Anita Hsu, an analyst at Masterlink Securities, said the order figure far exceeded market expectations, adding solid demand from the mainland helped, but it was mainly due to stronger demand in the US and European markets.

"We are expecting the slide of export orders to continue to narrow in the second quarter, as US buyers re-stock their inventories ahead of the peak (shopping) season in the fourth quarter. We recently raised our forecast for Taiwan's second quarter gross domestic product (GDP) to a 6 percent fall from the previous 8 percent slide."

March export orders from the mainland and Hong Kong, Taiwan's biggest market, fell 29.38 percent from year-ago levels, while orders from the United States, the island's No 2 market, fell 23.43 percent. Orders from the EU fell 22.9 percent.

Electronics orders fell 16.6 percent, moderating from February.

Taiwan's AU Optronics, the world's No 3 maker of LCD panels used in flat-screen TVs, yesterday raised its capital expenditure forecast by up to 20 percent, igniting hopes that the worst of the tech downturn could be over.

AU supplies top brands such as Dell Inc, Hewlett-Packard Co and Sony Corp.

Industrial output data, which was released at the same time as the export orders report, also provided some encouraging signs, though the road to recovery is likely to be a long one.

March industrial output fell 26.03 percent from a year earlier, its seventh straight month of declines, but the rate of decline was not as severe as the 31.9 percent analysts had expected, and was an improvement from the 27.23 percent drop in February.

Reuters

(HK Edition 04/24/2009 page3)