An upgrade to the well-established HKTDC Export Index, the new quarterly HKTDC Export Confidence Index will provide a more nuanced and comprehensive overview of business sentiment among
Derived from a survey of more than 500 Hong Kong exporters, the Export Confidence Index comprises five sub-indices - Sales and New Orders, Trade Value, Cost, Procurement and Inventory. These findings are evaluated in terms of Current Performance (how they represent present market sentiment) and Expectation (a measure of exporter sentiment with regard to the coming quarter).
For the first quarter of 2024 (January-March), the overall Expectation score was 47.4. This figure is close to the 50 benchmark (the dividing point between contractionary and expansionary trends) indicating an improved near-term export outlook. It was also notable that the Expectation scores for all sub-indices comfortably exceeded the Current Performance reading of 39.6, which, again, suggests exporters are confident that better times lie ahead.
Commenting on the thinking behind the new index, HKTDC Director of Research
"The success of this initiative to date has allowed us to confidently report a likely uptick in orders from Mainland China, as well as a gradual overall recovery in exports that looks set to be led by the electronics sector."
Optimistic prospects in Mainland China and US
Among the other key findings, the Sales and New Orders sub-index highlighted rising confidence in export growth, with its 49.9 reading close enough to 50 to suggest a high likelihood of stabilisation.
On the market front, exporters are generally more optimistic with regard to Mainland China and
Of the six key export sectors, electronics enjoyed the most positive outlook, followed by timepieces, equipment/materials, clothing, toys and jewellery.
There are also signs of stronger procurement activity in the electronics, toys and equipment/materials sectors as the corresponding Expectation indices approach or exceed the 50 level.
Overseas markets to regain growth momentum
For survey respondents, economic risks remained the primary concern among the external market issues that could potentially impact exports over the next 12 months. For 83.3% of respondents, an economic slowdown/recession in their primary markets was considered the biggest potential obstacle to export growth.
Putting the findings into perspective,
"It is also reassuring that 55.9% of exporters believe their future profitability will remain unchanged or actually improve, with 40.9% expecting their profit levels to stay stable and 15% seeing an upturn on the horizon."
References
HKTDC Export Confidence Index: https://research.hktdc.com/en/article/MTY0Nzc3MTE3OQ
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