* Oct orders -3.5% y/y vs -3.76% in Reuters poll
* Orders from China drop -7.3% y/y; U.S. down 3.0%
* Ministry sees Nov orders falling 1.4-3.5% y/y
* Orders could recover in Dec, ministry says
By Yimou Lee and Roger Tung
TAIPEI, Nov 20 (Reuters) - Taiwan’s October export orders fell for the 12th straight month but at a slower pace, amid signs of a pick-up in global demand for electronics despite the protracted U.S.-China trade war.
Orders in October fell 3.5% from a year earlier to $47.28 billion, data from Taiwan’s Ministry of Economic Affairs showed on Wednesday. That was slightly better than economists’ expectations for a 3.76% decline in a Reuters poll and better than September’s 4.9% fall.
The ministry said it has seen a rebound in demand for electronic gadgets, including smartphones and wearable devices, ahead of the peak holiday season when vendors are set to launch products.
But the growth was offset by the market’s “wait-and-see” approach amid trade war uncertainties and weak commodity prices, the ministry said.
“Orders could return to growth in December,” said Huang Yu-ling, director of the ministry’s statistics agency, adding that orders could drop 4% to 6% in 2019 compared with last year.
“The U.S.-China trade conflict has hit orders for traditional goods, especially machinery vendors,” Huang said.
The ministry sees November export orders declining 1.4%-3.5% from a year earlier, adding that rising demand for new technologies, including fifth-generation telecommunications (5G) technology and artificial intelligence, will help boost orders in the coming months.
Taiwan’s manufacturers are a key part of the global supply chain for tech giants such as Apple and Huawei and its exports have been hit by both trade war disruptions and sluggish global demand for hi-tech gadgets.
“Sales are going well for Apple’s new smartphones, which is likely to boost the momentum for telecommunication orders,” said Masterlink Securities Investment Advisory economist Johnny Ching, adding that the trade war remained a major growth uncertainty.
Analysts have said returning production from Taiwan manufacturers to the island offset the impact from the trade war between China and the United States, its two largest trading partners.
Investment from manufactures who moved part of their factories to the island from China had reached more than T$690 billion ($22.63 billion) in 2019, the government said this week.
The export-reliant economy was the largest beneficiary of “trade diversion” with $4.2 billion in additional exports to the United States in the first half of 2019, according to a U.N. study.
October orders from the United States slipped 3.0% from a year earlier, compared with September’s 1.8% decline.
Orders from China dropped 7.3% versus a 3.0% fall the previous month. Orders from European buyers gained 5.1% while those from Japan fell 15.1%.
Bucking a regional trend of growth downgrades, Taiwan in August raised its 2019 full-year forecast to 2.46% and predicted faster growth of 2.58% next year. ($1 = 30.4850 Taiwan dollars) (Additional reporting by Emily Chan Editing by Jacqueline Wong)