Exports rise again but challenges remain

Business | Winnie Lee 15 Sep 2020

The HKTDC Export Index rose by a further 6.9 points to 25.1 in the third quarter, the second consecutive quarter to record an increase, but it will continue to face considerable challenges over the near-term, the Hong Kong Trade Development Council said.

This suggested that export sentiment is on the up, but the overall index remained deep in contraction.

In the second quarter, the council revised the forecast of exports performance to fall 10 percent in 2020. The director of research, Nicholas Kwan, said it may not be that bad but there are a lot of unclear factors.

All export sentiment across major industries improved. Among them, the machinery export index was the best performer, up 8 points from the previous quarter to 29.

The exporters have the most confidence in the Japan export market while the mainland China market outlook improved the most.

All sub-indexes, including offshore trade and procurement activities, rose, but employment sentiment hit a four-year low. It fell 2.3 points to 39.8 in the third quarter. The toys and electronic industries were most in danger of layoffs.

Kwan said the employment figures reflect that the deeper the recession, the more pessimistic are companies on maintaining employment. It was difficult to predict the extent of layoffs.

He said that in the past, Hong Kong recessions generally lasted four to five quarters, but the market believes that the recession is still in its initial stage after three quarters.

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