HONG KONG—Early signs of a rebound in trade in Asia are brightening prospects for the region's export-dependent economies and are evidence that stronger U.S. demand is filtering through to help global growth.
The latest evidence came Tuesday when bellwether technology producer Taiwan reported export orders, which anticipate actual exports by a month or two, rose nearly 18% in February compared with the year-earlier period.
Combined with January's figures to average out the effects of Lunar New Year, orders rose a more modest 3.3%, still better than the contraction in orders seen at the end of 2011.
"Stabilizing demand from the U.S. may continue to be a key driving force in supporting growth of export orders," said Beatrice Tsai, deputy director of the statistics department of the Ministry of Economic Affairs.
She said stronger global demand for electronic and petrochemical products is driving the resurgence.
Economists see Taiwan as an early indicator and a proxy for global trade because of its integral role in supplying electronic components to computers, mobile phones and automobiles.
Taiwan Semiconductor Manufacturing Co., TSM -1.45% the world's largest contract chip
maker by revenue, is seeing "very strong" demand for certain chips and is considering boosting capacity, said Elizabeth Sun, a company spokeswoman.
"There is a higher probability in raising [capital expenditure spending] for this year than not raising" it, said Ms. Sun.
That represents a turnaround for the company, which as recently as January said it would cut its capital spending to $6 billion in 2012, down from $7.3 billion last year.
"The recovery happening is stronger than many economists and analysts are forecasting," says Herve Lievore, senior economist for Asia for AXA Investment Managers in Hong Kong. He sees Taiwan as a "canary in the coal mine" for global trade.
By his calculations, a pickup in Taiwan's trade activity means exports elsewhere in emerging markets in Asia, including China, should increase in the months ahead.
Other indicators also point to a rebound. Exports from trading hub Singapore rose 13% in the first two months of the year, and container shipments from China's biggest port, Shanghai, have shown signs of life.
"I'm hearing a lot more optimism from tech customers," says Hans Hickler, chief executive for Asia-Pacific for Agility, a logistics and supply-chain management company. "People have been sitting on inventory, and now they are pushing that out."
China, he says, remains a question mark. "The economy slowed a bit in China no doubt," he said, noting that customers that import items for infrastructure, automotive industry and rail development are still growing, but more slowly.
Trade activity globally slowed in the second half of 2011 as companies dealt with sluggish demand in the U.S., worries about the European debt crisis, and disruptions in supply chains due to natural disasters in Japan and Thailand, both key makers of automotive and technology components.
Stronger consumer sentiment and high levels of business investment in the U.S. are translating into demand for goods from Asia, at least partially making up for the troubles manufacturers are seeing from European clients.
"It's picking up pretty well. We have a lot more orders in the U.S.," says M. Raghuraman, chief executive for corporate marketing and branding at Brandix Lanka Ltd., Sri Lanka's largest clothing exporter.
Orders for the 2012 end-of-year holidays are strong, especially for fleece jackets, hoodies and yoga pants. "We are seeing huge increase in that business," he said.
In Japan, a weakening currency is lifting expectations for its exporters. The yen has fallen around 10% against the euro and the dollar so far this year.
"We've seen some kind of slip of the yen, but we're really far from where it should be," Nissan's chief executive, Carlos Ghosn, said Tuesday in Jakarta.
Investors in Japanese stocks are anticipating that the weaker yen will help company profits down the road.
The stock prices of export companies, such as robot maker Fanuc Ltd. 6954.TO -0.90%
and construction-machinery manufacturer Komatsu Ltd. 6301.TO -3.35% have risen
sharply as the yen has depreciated.
wsj.com
The latest evidence came Tuesday when bellwether technology producer Taiwan reported export orders, which anticipate actual exports by a month or two, rose nearly 18% in February compared with the year-earlier period.
Combined with January's figures to average out the effects of Lunar New Year, orders rose a more modest 3.3%, still better than the contraction in orders seen at the end of 2011.
"Stabilizing demand from the U.S. may continue to be a key driving force in supporting growth of export orders," said Beatrice Tsai, deputy director of the statistics department of the Ministry of Economic Affairs.
She said stronger global demand for electronic and petrochemical products is driving the resurgence.
Economists see Taiwan as an early indicator and a proxy for global trade because of its integral role in supplying electronic components to computers, mobile phones and automobiles.
Taiwan Semiconductor Manufacturing Co., TSM -1.45% the world's largest contract chip
maker by revenue, is seeing "very strong" demand for certain chips and is considering boosting capacity, said Elizabeth Sun, a company spokeswoman.
"There is a higher probability in raising [capital expenditure spending] for this year than not raising" it, said Ms. Sun.
That represents a turnaround for the company, which as recently as January said it would cut its capital spending to $6 billion in 2012, down from $7.3 billion last year.
"The recovery happening is stronger than many economists and analysts are forecasting," says Herve Lievore, senior economist for Asia for AXA Investment Managers in Hong Kong. He sees Taiwan as a "canary in the coal mine" for global trade.
By his calculations, a pickup in Taiwan's trade activity means exports elsewhere in emerging markets in Asia, including China, should increase in the months ahead.
Other indicators also point to a rebound. Exports from trading hub Singapore rose 13% in the first two months of the year, and container shipments from China's biggest port, Shanghai, have shown signs of life.
"I'm hearing a lot more optimism from tech customers," says Hans Hickler, chief executive for Asia-Pacific for Agility, a logistics and supply-chain management company. "People have been sitting on inventory, and now they are pushing that out."
China, he says, remains a question mark. "The economy slowed a bit in China no doubt," he said, noting that customers that import items for infrastructure, automotive industry and rail development are still growing, but more slowly.
Trade activity globally slowed in the second half of 2011 as companies dealt with sluggish demand in the U.S., worries about the European debt crisis, and disruptions in supply chains due to natural disasters in Japan and Thailand, both key makers of automotive and technology components.
Stronger consumer sentiment and high levels of business investment in the U.S. are translating into demand for goods from Asia, at least partially making up for the troubles manufacturers are seeing from European clients.
"It's picking up pretty well. We have a lot more orders in the U.S.," says M. Raghuraman, chief executive for corporate marketing and branding at Brandix Lanka Ltd., Sri Lanka's largest clothing exporter.
Orders for the 2012 end-of-year holidays are strong, especially for fleece jackets, hoodies and yoga pants. "We are seeing huge increase in that business," he said.
In Japan, a weakening currency is lifting expectations for its exporters. The yen has fallen around 10% against the euro and the dollar so far this year.
"We've seen some kind of slip of the yen, but we're really far from where it should be," Nissan's chief executive, Carlos Ghosn, said Tuesday in Jakarta.
Investors in Japanese stocks are anticipating that the weaker yen will help company profits down the road.
The stock prices of export companies, such as robot maker Fanuc Ltd. 6954.TO -0.90%
and construction-machinery manufacturer Komatsu Ltd. 6301.TO -3.35% have risen
sharply as the yen has depreciated.
wsj.com
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