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SINGAPORE, Dec 14 (Reuters): Things are looking up for Asia's exporters: a recovery from a slowdown earlier this year is gathering momentum and is expected to become more broad based in early 2006, while demand inside and outside Asia appears firm.
The upturn in exports, driven by a pick-up in global demand for technology goods, has been led by tech-focused economies such as those in Taiwan and South Korea.
That recovery should now spread to non-tech sectors in the months ahead, benefiting Southeast Asia, as Japan's economic recovery gains momentum and as demand from fast-growing China holds firm.
"If you look at the data for Korea, Taiwan and Singapore, high-end electronic exports are growing pretty strongly and that will probably continue," said Yiping Huang, chief economist for Asia at Citigroup in Hong Kong.
However, demand for Asian goods could soften by the second half of 2006 as higher US rates bite into the world's biggest economy, analysts say.
After a stellar year for Asian exports in 2004, growth rates eased in the first half of 2005. But there are signs that momentum is once again picking up.
South Korean exports in November rose 12.2 per cent from a year earlier to a record high while the latest numbers from Singapore and Malaysia beat market expectations.
Companies are showing positive signs too.
Export prospects have boosted shares in South Korean auto maker Hyundai Motor Co., while Singapore-based Chartered Semiconductor Manufacturing Ltd., the world's fourth-largest supplier of built-to-order microchips, last week raised fourth-quarter sales and profit forecasts.
Growth in China's economy, an increasing influence on Asian exporters, is expected to slow next year but analysts said the country's import demand should hold firm.
Exports from the region to the United States rose in the first half of 2005 just 4.6 per cent from a year earlier, but exports to Japan rose 14.7 per cent and shipments to China jumped 23.4 per cent.
Japan's economy is showing signs of sustainable growth after more than a decade of stagnation and its growing import demand is seen as an important offset for regional economies that face stiff competition from China.
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