16 Dec 2014
HKTDC Export Index 4Q14: Exporters Optimistic for 2015, Despite Short-term Fall in Confidence
The HKTDC Export Index is designed to monitor the current export performance of Hong Kong traders and gauges their near-term prospects.
- In 4Q14, Hong Kong exporters’ confidence dropped to its lowest level in two years. Yet, Hong Kong exporters are more optimistic over the medium term. For 2015 as a whole, 73% of respondents expect their sales to increase or remain unchanged.
- All of the major industries were negative with regard to their short-term outlook, although there was less pessimism among jewellery and machinery exporters.
- In the major markets, export sentiment fell marginally for the US, EU and Japan, while it improved slightly with regard to the Chinese mainland.
- The Trade Value Index dropped below 50, signalling lower unit prices in the near term. Procurement activities may also shrink, as indicated by the respective reading falling further below 50.
- With regard to labour cost pressures, 57% of respondents reported higher labour costs on the mainland during 4Q14, down from 67% and 69% in 3Q14 and 2Q14, respectively.
The HKTDC Export Index fell to 38.2 in the fourth quarter of 2014 (4Q14), its lowest level in two years. In 3Q14, the figure was 41.7. Overall, exporters remain pessimistic about their likely export performance over the short-term.
All major industries reported readings below 50. Electronics, clothing and toys exporters took more pessimistic turn in 4Q14, while jewellery, machinery and timepieces enjoyed higher readings (42.8, 42 and 38.7, respectively). Export confidence was relatively higher among jewellery and machinery exporters.
Export sentiment fell across all of the major markets except for the Chinese mainland. The indices for the US, EU and Japan dropped to 44.8, 43.3 and 47, respectively while the index for the Chinese mainland edged up to 48.3.
The Offshore Trade Index dropped below 50 to 42.1 in 4Q14, from 50.7 in 3Q14. However, exporters are less negative with regard to their performance in offshore trade (i.e. those shipments not passing through Hong Kong, but handled by Hong Kong exporters), as compared with the overall export performance.
The Trade Value Index dropped to 48.7 in 4Q14, after staying above 50 for several quarters. Except in the case of toys and machinery, all major industries posted readings below 50, indicating lower unit prices in the near term.
The Procurement Index slid for the second consecutive quarter, falling to 46.7 in 4Q14 (down from 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 toys, however, rebounded to 52.8, signalling a positive procurement sentiment for the near term.
The Employment Index edged up to 47.1 in 4Q14, from 45.1 in 3Q14. All industries saw lower readings in 4Q14. Hiring confidence is seen as at the lowest in the timepieces sector, which reported a reading of 39.2.