Less export confidence in Hong Kong

Less export confidence in Hong Kong

The unstable global economic environment has dampened confidence among Hong Kong exporters. The latest Export Index, released this week by the Hong Kong Trade Development Council (HKTDC), showed the index in the third quarter fell to its lowest level since the fourth quarter of 2012

Meanwhile, the HKTDC has revised downwards its 2015 export growth forecast, from three per cent to zero per cent. HKTDC Director of Research Nicholas Kwan said that Hong Kong exports have come under pressure from worse-than-expected economic performance overseas and lingering concerns about the global economy. “The Greek debt crisis continues to drag down the recovery of the European Union economy,” said Kwan. “While the Chinese mainland has introduced stimulus measures, economic growth there continues to moderate.” He added that the recent renminbi depreciation has been far smaller than for other Southeast Asian currencies, having little impact on Hong Kong’s exports.

Kwan explained that while the United States economic growth will remain stable, an imminent interest rate hike will likely increase volatility in capital flows and exchange rates in the emerging markets. “The global economy now faces several potential risks and the trading environment for the rest of the year will be challenging,” he said. The third quarter results showed that the Export Index dropped 9.7 points from the previous quarter, to stand at 37.1. A reading below the watershed 50 mark reflects negative sentiment among exporters.

Indices for all sectors, except jewellery, fell, with the toy industry suffering the biggest slide, from 52.5 to 35.6. The index for the machinery industry was 40.7, while those of other industries, including electronics, clothing, jewellery and timepieces fell below 40.

Negative sentiment dominated the key markets, with indices for the US, the European Union, Japan and the Chinese mainland all moving lower. In particular, the index for the EU was the lowest at 42.8. The Trade Value Index also fell to 42.6. Only the timepiece industry maintained its value index above the 50 mark (51.4), indicating that Hong Kong timepiece traders generally believe that prices will stay at present levels, though room for further increases would be limited. In addition, the Purchasing Index in the third quarter was 38.2, suggesting that purchasing sentiment had trended lower.


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