29 March 2018
Policyholder Survey – Prospect Opportunities in Mainland Markets amid Conservative Export Business Outlook
While the global demand continued to revive, uncertainties still persist. HKECIC’s recent survey showed that policyholders remained conservative on the exports business outlook. Decreasing orders and rising credit risks are the main challenges. However, the proportion of policyholders perceiving the Mainland domestic market as opportunities for growth was higher.
Between December 2017 and February 2018, the HKECIC interviewed 443 policyholders on the challenges ahead and their business outlook. All these policyholders are from industries including clothing, electronics, toys, jewellery, plastics and electrical appliances. The proportion of policyholders identifying increase in cost of raw materials as the major challenge increased to 18.7% from 14.6% when compared to previous three months (September to November 2017). Policyholders identified decrease in orders as the major challenge decreased by 4 percentage points to 23.6%.
Regarding the business forecast for the coming year, the survey showed that 84.7% of respondents anticipating their business to remain stable. Policyholders expecting their business to increase or decrease accounted for 5.6% respectively. The statistics indicated that policyholders’ attitude towards their business development remained prudent compared to the previous three months.
For respondents expecting an increase in business, the proportion placing hope on increasing orders rose by 2.4 percentage points to 56.9% while improving global economy accounted for 22.4%. The proportion of placing hope on developing the Mainland domestic market (or the Mainland market) surged from 8.0% to 15.5% when compared to the previous three months.
“Fixed Amount Cover Endorsement” Provides More Flexibilities
The value of merchandise exports in 2017 rose by 8.0%, marking the fastest annual growth since 2011. The brightened global economic outlook should continue to be supportive of Hong Kong's exports. Yet, potential rise in trade protectionism in major economies and heightened geopolitical tensions in various regions. Exporters should pay more attention to country and buyer risks. HKECIC’s “Fixed Amount Cover Endorsement” under the Small Business Policy provides more flexible options to SMEs, with application period until 31 August 2018. More information is available on the HKECIC website www.hkecic.com.