Export forecast ships out measure of gloom

Finance | 24 Jun 2021

Avery Chen

The forecast for export growth for this year has been raised by the Hong Kong Trade Development Council to 15 percent from 5 percent on improving sentiment, a strong export performance recently and a lower comparison base.

A 15-percent increase would constitute the highest level of growth since 2010. That was when exports surged by 22.8 percent in the post-global financial crisis recovery period.

The TDC Export Index also rose by 9.7 points to 48.7 in the second quarter - its fifth consecutive quarterly increase since its all-time low of 16 for the first quarter of 2020.

But the index is still below the neutral threshold of 50, which means the outlook remains pessimistic.

The council conducts the export index survey every quarter, interviewing 500 local exporters from six major sectors to gauge confidence in near-term prospects.

"Led by mainland China and the United States, the global economy has rebounded steadily, which will continue to bolster Hong Kong's export performance," TDC director of research Nicholas Kwan said.

Hong Kong's exports increased by 33.2 percent to HK$1.11 trillion in the first quarter, while April saw growth of 24.4 percent, buoyed by a global revival in trade and more production activities.

While concerns remain, the impact of the pandemic has eased in the past few months, Kwan said.

The percentage of respondents reporting hits by pandemic-related issues fell to 56.9 percent in the second quarter from 78.2 percent in the first.

Among Covid-related impacts, respondents cited a reduction in order sizes (66.4 percent), increased transportation costs (46.4 percent) and logistics/distribution disruptions (42.6 percent).

Meanwhile, a subindex tracking employment sentiment fell by 1.6 points to 41.6, highlighting the possibility of redundancies in the near term.

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