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HKTDC Export Index 3Q14: Export Confidence Weakens

The HKTDC Export Index is designed to monitor the current export performance of Hong Kong traders and gauge their near-term prospects.

  • Hong Kong exporters’ confidence weakened in 3Q14, a fact reflected in a decline in the HKTDC Export Index.
  • All major industries became more negative with regard to their short-term outlook, although there was less pessimism among toys and electronics exporters.
  • In the major markets, export sentiment fell marginally for the US, Japan and Chinese mainland, while it improved slightly with regard to the EU.
  • The Trade Value Index edged down to 50.9 in 3Q14, signalling a less positive view over unit prices for the near term. However, procurement activities may shrink, as indicated by the respective reading falling below 50.
  • With regard to labour cost pressures, 67% of respondents reported higher labour costs on the mainland during 3Q14, virtually no change from the 69% in 2Q14.

The HKTDC Export Index fell to 41.7 in the third quarter of 2014 (3Q14), from 47.6 in 2Q14. Overall, exporters became more pessimistic about their likely export performance over the short-term, which may signal a quarter-to-quarter contraction in Hong Kong’s exports.

 

Chart: HKTDC Export Index
Chart: HKTDC Export Index

Except in the clothing sector, all major industries saw lower readings in 3Q14. In particular, the indices for jewellery, timepieces and machinery dropped below 40. Export confidence is seen as relatively higher among toys and electronics exporters.

 

Table: HKTDC Export Index
Table: HKTDC Export Index

 

Export sentiment fell marginally across all major markets except for the EU. The indices for the US, Japan and the Chinese mainland dropped to 48.3, 48.2 and 46.9, respectively while the index for the EU edged up to 48.2 in 3Q14.

 

Table: HKTDC Export Index by Market
Table: HKTDC Export Index by Market

 

The Offshore Trade Index increased to 50.7 in 3Q14, up for the third consecutive quarter. Despite a pessimistic outlook in terms of overall export performance, exporters are positive with regard to their performance in offshore trade, i.e. those shipments not passing through Hong Kong, but handled by Hong Kong exporters.

Chart: Offshore Trade Index
Chart: Offshore Trade Index

The Trade Value Index edged down further to 50.9 in 3Q14, yet stayed in expansionary territory. Except for machinery, all major industries posted readings above 50, signalling higher unit prices in the near term. Of particular note, the indices for jewellery and clothing climbed, respectively, to 56.7 and 56.1 in 3Q13.

 

Table: Trade Value Index
Table: Trade Value Index

 

The Procurement Index dropped to 48.4 in 3Q14. A reading below the watershed of 50 may signal that procurement activities are likely to shrink in the near term. The index for clothing, however, remained above 50 while the toy index stood at 50, signalling a neutral outlook.

Table: Procurement Index
Table: Procurement Index

 

The Employment Index edged down to 45.1 in 3Q14, from 47.5 in 2Q14. All industries saw lower readings (below 50) in 3Q14, signalling labour contraction in the near term. Hiring confidence is seen as the lowest in the clothing sector, which reported a reading of 37.3.

 

Table: Employment Index
Table: Employment Index

Download Historical Data (as of September 2014)

Content provided by Picture: HKTDC Research
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