16 June 2015
HKTDC Export Index 2Q15: Exporter Confidence on the Rise
The HKTDC Export Index monitors the current export performance of Hong Kong traders and gauges their near-term prospects.
- In 2Q15, Hong Kong exporters’ confidence showed signs of further improvement, with the HKTDC Export Index reaching 46.8, edging up from 44.9 in 1Q15.
- Sentiment improves among electronics, timepiece exporters, as well as in the toys sector, where the index shifted over the 50 watershed in 2Q15.
- Overall, exporters maintained an essentially neutral view of Japan, the US and the Chinese mainland markets, with a slight improvement in their expectations of the EU.
- Both the Trade Value Index and the Procurement Index rose in 2Q15. The procurement sentiment was most upbeat for toy and electronics exporters.
- Exporters experienced stronger labour cost pressures in this quarter. In total, 69% of respondents reported higher labour costs on the mainland during the surveyed quarter, up from 64% in 1Q15 and 57% in 4Q14.
The HKTDC Export Index edged up for the second consecutive quarter to 46.8 in the second quarter of 2015 (2Q15), rising from 44.9 in 1Q15. Overall, exporters were less pessimistic about their likely export performance over the short-term.
Among the major industries, electronics, toys and timepieces reported higher readings for 2Q15. In particular, the index for toys leaped by 13.1 to 52.5, taking it above the watershed of 50 and signalling expansion in the near term. Clothing and jewellery exporters, however, had indices below 40, reflecting their pessimism as to their likely export performance over the short-term.
Export sentiment across all the major markets saw little change from the previous quarter. The indices for Japan, Chinese mainland and US hovered around the watershed of 50, while the index for the EU increased for the second quarter, registering at 48.6 in 2Q15.
The Offshore Trade Index increased to 43 in 2Q15, from 38 in 1Q15. This indicated that exporters were less negative with regard to their offshore trade performance (i.e. those shipments not passing through Hong Kong, but handled by Hong Kong exporters). With a lower reading than the HKTDC Export Index, Hong Kong’s offshore trade is likely to underperform Hong Kong’s overall exports in the near term.
The Trade Value Index edged up to 49.4 in 2Q15, from 48.3 in 1Q15. Except for clothing and toys, all major industries reported higher readings in 2Q15. Higher unit prices are expected in the near term for timepieces, jewellery and machinery, as their indices jumped into positive territory, reaching 58.8, 52.9 and 51.5 (respectively) in 2Q15.
The Procurement Index enjoyed a strong turnaround, rising to 50.8 in 2Q15, from 39.3 in 1Q15. A reading above the watershed of 50 indicates that procurement activities are likely to increase in the near term. With readings above 50, toys and electronics exporters showed the strongest procurement sentiment among major industries in 2Q15, while jewellery exporters were the most pessimistic.
The Employment Index rebounded to 46.8 in 2Q15, from 42.9 in 1Q15. Except for jewellery and machinery, all industries showed higher readings compared to the previous quarter. In particular, the index for toys increased to 54.2 in 2Q15, signalling labour expansion in the near term. On the other hand, hiring confidence remained the lowest in the clothing sector, which reported a reading of 41.7 in 2Q15.