According to the forecast released by IHS Markit (IHS) on October 15, 2021, the global economy will grow by 5.5% in 2021. Due to affected by the persistence of the epidemic, the energy transition period, the shortage of supply chain, the rising in inflation, and government policy interventions, the global economic growth momentum may slow down.
In September 2021, Taiwan’s economy continued to show a red signal and the Purchasing Managers Index continued to expand. However, the Coincident Indicators continued to fall. While manufacturing and export orders continued to increase due to the steady recovery of the global economy, the warming terminal demand, and the international raw materials market remains high price level, which support the momentum of technology applications and traditional industrial products. Also, the Leading Indicators has turned to increase, and the outlook for manufacturing and purchasing managers over the next six months signals expansion, which means that the epidemic impact to domestic economy has been slowed down. However, the risk of the spread of the variant virus epidemic and the existence of supply chain shortage, coupled with trade and technological disputes may continue, which deserve close observation on follow-up developments.
Taiwan’s export orders in September 2021 amounted to US$62.90 billion, for an increase of US$12.88 billion or 25.7% over the same period in 2020. The main reasons for this increase are the launch of many international brand smartphones, the continued increase in demand for emerging technology applications, and the steady increase for final demand products, as well as the high price levels in international raw material markets, which drove the overall increase with 2 digits in orders for major products.
In September 2021, total trade value reached US$72.86 billion, for an increase of 34.0% over the same period last year. Of this, exports totaled US$39.65 billion, for a year-on-year increase of 29.2%, while imports totaled US$33.21 billion, for a year-on-year increase of 40.4%. Given the drive for the continued recovery of global economy, and the emerging technology applications and digital transformation business opportunities, Taiwan's exports and import both reached their highest scale in a single month compared to past year.
Observations on the trade performance of Taiwan and its major trading partners:
Taiwan's exports in September 2021 to its major trading partners (mainland China, the ASEAN 10, the US, the EU, and Japan) grew across the board. The increase in exports to the EU was the highest, at 43.6%, followed by exports to Japan, at 36.8%. Exports to the US, mainland China and the ASEAN 10 rose by 34.0%, 25.4% and 23.7%, respectively.
Taiwan's imports from its major trading partners (mainland China, Japan, the EU, the ASEAN 10, and the US) in September 2021 were driven by the increasing in derived demand for exports and price of international raw materials. The highest increases in imports came from the ASEAN 10 at 50.4%, followed by imports from mainland China, the U.S., the EU, and Japan which increased by 39.5%, 28.0%, 23.6% and 23.5%, respectively.
Of the top 10 exports in September 2021, electrical machinery equipment and parts (HS85) grew by US$4.12 billion year-on-year for the most outstanding performance. In addition, the growth rate of fossil fuels (HS27) and iron and steel (HS72) increased significantly, which is mainly due to the rising demand for internationally-traditional industrial products and the price of raw material market.