New Transportation market report from Business Monitor International: "Taiwan Shipping Report Q3 2013"

Boston, MA -- (SBWire) -- 08/12/2013 --Downside Risks Grow But 2013 GDP Forecast Still At 3.0%

Since our last quarterly report the downside risks to our Taiwan economic forecast have edged up. We are holding to our below-consensus forecast of 3.0% GDP growth, but we note that Q113 data was disappointing. GDP growth decreased to a seasonally-adjusted annualised rate of 3.2%. Other signs of weakness include faltering export orders, which fell for two consecutive months, thereby interrupting the recovery in overseas sales that had begun to take shape in H212. Admittedly it is a finely balanced picture, with some upside risks also in play. Over the long term we believe Taiwan is overdependent on the technology sector, but reports of new product launches and speculation around further expansion of the Apple line of products could provide some short-term impetus to the economy. We continue to note concerns over the strength of the mainland China recovery, and over domestic issues such as inefficiencies in the banking and financial sector, and rigidities in the labour market. This year's growth will follow on from a difficult 2012 when GDP grew by only 1.3%. Prompted by our reassessment of Taiwan's investment and export prospects, we have lowered our average annual growth forecasts for the period running from 2013 to 2017, down to 3.9%.

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In line with the modest macroeconomic recovery we now expect something of a standstill in 2013 port activity levels. Broadly speaking Kaohsiung, Taiwan's largest port, remains the most resilient, not least because it is attracting new investment. But gross tonnage handled will drop marginally, while container handling will increase, also marginally. Keelung, the country's second largest port, will see further falls after a difficult 2012. On the plus side, the policy of cross-straits integration is expected to continue as Taiwan's ports and shipping lines position themselves to work through a series of alliances and partnerships with mainland companies over the next few years.

Headline Industry Data

- 2013 Port of Kaohsiung tonnage throughput forecast to drop by 1.8% to 118.582mn tonnes; over the medium-term to 2017 we project an annual average increase of 0.8%.
- Port of Kaohsiung container throughput forecast to grow 1.0% to 9.879mn TEUS in 2013; over the medium-term we project an annual average 2.9% increase.
- Port of Keelung will see tonnage falling by 3.2% in 2013 to 67.182mn tonnes, with container traffic also down by 1.8% to 1.578mn twenty-foot equivalent units (TEUs).
- 2013 total trade growth forecast to recover by a 3.4% in real terms, compared to an estimated drop of 0.9% in 2012.

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