18 June 2012
Confidence improves grudgingly
The HKTDC Export Index in each TQ issue is designed to monitor the current export performance of Hong Kong traders and gauge their near-term prospects.
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The HKTDC Export Index continued to edge up for two consecutive quarters, to 47.2 in the second quarter of 2012 (2Q12). Although sentiment improved, a reading below 50 still indicates a pessimistic outlook and signals quarter-on-quarter contraction in Hong Kong's exports over the short term.
Higher readings were recorded for all major industries, reflecting across-the-board improvement in sentiment. In particular, the index for timepieces jumped furthest to 57.8, the only industry poised to expand during the quarter. Clothing exporters, however, had the lowest confidence compared to other industries.
Among major markets, exporters have been pessimistic towards the EU with its index lingering at the level of 42 over recent quarters while those exporting to the Chinese mainland turned slightly optimistic with its index edging up to 51.6 in 2Q12, from 49.7 in 1Q12. The index for the US also edged higher, while Japan's saw little change and remained below 50.
The Offshore Trade Index jumped to expansionary territory, with a reading of 54.6 in 2Q12. Offshore trades (shipments not passing through Hong Kong but handled by Hong Kong traders) are likely to expand on a quarter-on-quarter basis, outperforming Hong Kong's total exports.
The Trade Value Index retreated to 57.3 in 2Q12 but remained well above the watershed of 50. Unit prices are expected to continue going up, although probably at a slower pace. In particular, the index for timepieces jumped to 73.5, its highest reading of recent quarters.
The Procurement Index rebounded to 67.5 in 2Q12, signalling strong procurement sentiment when compared to the last quarter. In particular, clothing and toys saw the largest increase. Apart from a rise in input costs, companies could be intending to replenish more raw materials or goods for future demand.
The Employment Index dropped slightly to 43.5 in 2Q12, from 46.7 in 1Q12, with a rather diverse view across sectors. The index for machinery increased to 51.2 while jewellery and timepieces stood at 50. Clothing and toys, however, reported readings below 40, signalling contraction of that labour force in the near term.
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