Hong Kong exports growth pegged at 5%

2013 may be a better year.

According to Hang Seng Bank's Hong Kong Economic Monitor, incoming trade figures have been highly volatile over the past two months. Hong Kong’s exports unexpectedly dropped 2.8% in October, after a strong gain of 15.2% in September.

Here's more from Hang Seng:

The significant volatility likely reflected both the base effect due to a strong October growth last year (+11.5%) as well as launch of major tech products in October.

The bottom line is that the seasonally-adjusted growth suggests export sector has been on the mend since September.

Overall, we expect a sustained recovery to prevail in the course of 2013. The International Monetary Fund projects the growth of global economy will accelerate from 3.3% in 2012 to 3.6% next year.

Our study finds that a 3.6% rise in the global GDP translates into a 10.4% export growth in Hong Kong. Of note, the export growth has been about 5 percentage points below the growth rate implied by the regression analysis since 2011, probably due to stronger structural headwinds such as rising labor costs in the Mainland and faster relocation of low-end manufacturing enterprises to the ASEAN countries.

After taking into account these structural impediments, we factor in a more modest trade growth, forecasting real increases of 5% and 5.7% for exports and imports respectively in 2013.