Export Index rises for the fourth consecutive quarter

Exporter sentiments also improve over economic recovery forecasts.

The Hong Kong Trade Development Council (HKTDC) Export Index rose 2.8 points to 39 in Q1 2021, the fourth consecutive month that the index rose and an indication of the industry’s continued recovery.

However, the HKTDC noted that considerable uncertainty remains as the overall figure stands below 50.

"Although the index has risen for four consecutive quarters, it remains in contractionary territory, suggesting a cautiously optimistic export outlook," said HKTDC's director of research Nicholas Kwan.

The survey found the proportion of exporters hit hard by the pandemic dropped to 33.1% the first quarter, compared to 56.7% in the previous quarter. Exporters are mainly concerned about the resurgence of the pandemic (46%) and the softening of global demand (28.4).

"As the impact of COVID-19 begins to diminish and business operations gradually return to normal, the Hong Kong economy is expected to regain the momentum for growth," Kwan said.

The HKTDC also observed that nearly half of exporters, or 45.4%, have plans of building up online sales channels in 2021. Some 45.7% are looking into developing other product categories.

The most popular channels amongst those planning to digitalise are website/ applications/social commerce (77.3%), third-party e-commerce platforms (64.9%). Others have used online sourcing platforms (36.1%) or online exhibitions (19.1%).

HKTDC also reported exporter confidence has improved across all the major industry sectors, with toys (44.7), machinery (42.9), and jewellery (42.2) outperforming the overall average.

"The improving export sentiment is further evident in an upward trend in the subsidiary indexes including the Trade Value Index and Employment Index,” HKTDC economist Samantha Yim said.

Trade Value Index increased 9.8 points to 46.3, whilst employment index gained 1.7 points to 43.2. Procurement index, meanwhile, dropped 1 point to 33.6.

“The Procurement Index remained subdued, suggesting exporters are worrying orders might drop in the near future," Yim said.