Export Confidence Maintained Despite Temporary Shortfall
|Speaking at a press conference today, HKTDC Director of Research Nicholas Kwan said that Hong Kong exports in the first four months of the year performed weaker than expected. The Council has revised Hong Kong’s export growth forecast for 2014 from 5.5 per cent to 4.5 per cent|
| At the press conference, HKTDC Principal Economist (Global Research) Daniel Poon encouraged Hong Kong companies to redouble their sales efforts in traditional markets, while responding to business opportunities in emerging markets|
Export Index Dips
Mr Kwan also revealed that the HKTDC Export Index for the second quarter had edged down 0.5 points from the previous quarter, to 47.6. A reading below 50 indicates a pessimistic sentiment and signals a quarter-on-quarter contraction in Hong Kong’s exports.
Among industry sub-indices, there were improvements in toys, jewellery and electronics. The respective indices for clothing, machinery and timepieces, however, had softened. The export index for clothing, in particular, dropped below the 40 mark, to 39.4. As to individual markets, the indices for Japan, the United States and the Chinese mainland were all hovering around 50, reflecting the generally neutral sentiments of exporters in these markets. Confidence in the European market was somewhat weaker.
That said, Mr Kwan believed that there would be improvements in the global trade environment in the second half of the year. He also said that Hong Kong’s export prospects remain buoyant.
His point was echoed by Daniel Poon, the HKTDC’s Principal Economist (Global Research). “As America’s economic recovery gains momentum, the unfavourable effects of the severe cold weather at the beginning of this year are now subsiding. As recoveries in the European Union and Japan are also expected to keep their courses, the developed economies should be the main driving force behind global economic growth.”
Focus on Asia
Mr Poon encouraged Hong Kong companies to redouble their sales efforts in traditional markets, while responding to business opportunities in emerging markets. Asia, he emphasised, remains the region with the most economic vibrancy. Turning to specific markets, Mr Poon had the following comments:
- US: Its economic growth is expected to be the strongest among developed countries. The quantitative easing programme may well be withdrawn this year, but the low-interest rate environment is expected to linger.
- European Union: The gradual stabilisation of the debt crises and the extensive implementation of fiscal consolidation and structural reforms among member countries will lead to the continual recovery of the EU economy. Growth resumed in the EU beginning the second quarter of last year and the momentum will be maintained and extended to countries such as Portugal and Spain. Non-euro countries such as the United Kingdom also performed decently.
- Japan: “Abenomics” continues to contribute positively to the economy. The aggressive monetary easing policy is keeping the strength of the yen in check and boosting exports. But the sales tax hikes this year and next will have an adverse impact on consumption.
- Chinese mainland: Although the government has signalled that it may accept slower economic growth, it is still expected to roll out stimulus measures to maintain economic vitality. In the long term, its reforms will boost the economy, while urbanisation will stimulate domestic demand, generating major business opportunities for Hong Kong suppliers.
- ASEAN: The ASEAN Community to be established in 2015 will promote economic growth in member countries and throughout the region. Hong Kong suppliers should exploit opportunities in emerging consumer markets such as Indonesia, while considering markets with low production costs such as Myanmar and Cambodia and exploring the feasibility of setting up production bases in those countries.
- Other emerging markets: The hosting of the FIFA World Cup this year and the Summer Olympics in 2016 is stimulating economic growth in Brazil; outlooks for Mexico, Poland, Hungary, the Czech Republic and Turkey are promising, while Dubai remains a regional trading hub.
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