HONG KONG, Sept 19, 2022 – (ACN Newswire) – The sentiment among Hong Kong exporters continues to boost. The HKTDC Export Index increased an additional 1.9 points to 32.8 in the 3rd quarter of 2022, indicating a sustained improvement in confidence in the short-term export performance. However, exporters are facing downward pressure on prices, with the Trade Value Index falling 11.5 points to 40.2.
|HKTDC Director of Research Irina Fan and Corey To announced the HKTDC Export Index for the 3rd quarter of 2022 at a press conference today (19 September).|
HKTDC Director of Research Irina Fan told a press conference today a deteriorating external environment was keeping the recovery slower than hoped. “Weakening demand in major markets dampened by high inflation and aggressive monetary tightening, in conjunction with rising Sino-US trade tensions along with other fallouts from the Russia-Ukraine conflict, also cloud the export outlook,” she said.
The HKTDC conducts the Export Index survey every quarter, interviewing some 500 Hong Kong exporters from six major industries – machinery, electronics, jewellery, watches and clocks, toys and clothing – to gauge business confidence in near-term export prospects. The Index indicates a good or pessimistic outlook, with 50 because the dividing line.
Shift in focus
Ms Fan said over fifty percent of the respondents (52.0%) in the most recent exporters’ survey view the shortened quarantine requirement in the Mainland China – a seven-day centralised stay plus three days of home confinement – as positive for business. She added that enabling more flexible business travel arrangements (53.8%), the gradual resumption of cross-border commerce and trade (33.0%), and a smoother production flow (31.8%) were cited because the top benefits.
As the impacts of the pandemic continue steadily to decline, COVID-19-related issues remain on the list of top concerns for Hong Kong exporters on the next 90 days. Most respondents said COVID-19 persistence (40.2%) and border closure (22.6%) will be the major impediments to export performance.
“To greatly help them cope with this changing environment, Hong Kong companies are maintaining shift from being market-focused to more money-focused,” Ms Fan said. Developing other product categories (36.9%) and stabilising finances to make sure sufficient cashflow (35.6%) will be the hottest business strategies adopted by the survey respondents. Additionally, more of these said they plan to increase unit prices (35.2%, up 18 percentage points).
Jewellery, Japan outperform
HKTDC Economist Corey To said jewellery was the most promising sector with the best sub-index at 44.2, accompanied by toys at 37.0. The jewellery sector also showed the biggest improvement, with a 9.9-point increase from the prior quarter, as the electronics sector gained 2.3 points to 32.7.
Mr To said Asia continues to supply a comparatively promising outlook, adding that Japan remains the very best performer at 48.4 (up 0.8 points), accompanied by the Association of Southeast Asian Nations (ASEAN) bloc (46.9, up 3.6 points) and Mainland China (45.8, up 2.7 points).
Recovering supply chains
He said the pandemic effect on businesses tended to be less severe in the 3rd quarter in comparison with April-June. “Fewer respondents experienced negative impacts on the business caused by the pandemic (77.9%, down 1.2 percentage points). Included in this, those whose business have been very negatively affected fell 11.8 percentage points to 23.4%.”
Mr To said rising transportation costs (64.1%) and logistics disruptions (51.8%) remained the main element challenges for Hong Kong exporters, though both fell significantly – by 8.5 and 13.4 percentage points respectively – from the prior quarter, reflecting the gradual easing of supply chain issues. “Nonetheless it will probably be worth noting that more respondents reported communications problems with overseas buyers/suppliers (48.2%, up 26.6 percentage points) and order cancellations (21.2%, up 4.5 percentage points).”
The Hong Kong Trade Development Council (HKTDC) is really a statutory body established in 1966 to market, assist and develop Hong Kong’s trade. With 50 offices globally, including 13 in Mainland China, the HKTDC promotes Hong Kong as a two-way global investment and business hub. The HKTDC organises international exhibitions, conferences and business missions to generate work at home opportunities for companies, particularly small and medium-sized enterprises (SMEs), in the mainland and international markets. The HKTDC also provides up-to-date market insights and product information via research reports and digital news channels. To learn more, please visit: www.hktdc.com/aboutus. Follow us on Twitter @hktdc and LinkedIn
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