07.24.2001
Exports continue to diminish

• Development: June export orders dropped 20.0% YoY (and 2.6% MoM) while industrial production slumped 11.3% YoY (and 3.5% MoM). Contraction in manufacturing amid smaller orders continue to lead to plant closures, pushing the unemployment rate to yet another record monthly high of 4.6% (seasonally adjusted).

• Analysis: We maintain that we are yet to see the bottom in Taiwan’s export led slump. We forecast actual exports will contract more than 20% in July.

• Primasia View: The jobless rate should peak at 5.0% in Aug. amid seasonal factors, and average 4.3% for 2001, up from 3.0% in 2000. Cyclical as well as structural factors keep rate relatively high, historically, going into 2002.