The HKTDC export index for the third quarter of 2020 rises 6.9 points from the previous quarter to a reading of 25.1, the Hong Kong Trade Development Council (HKTDC) said recently.
The Q3 index is also 9.1 points higher than the record low in the first quarter of the year, the HKTDC added.
The index is based on the HKTDC’s business confidence survey in August of 500 local traders from six major industry sectors including electronics, jewellery, timepieces, toys, clothing and machinery.
The export index reflects the prospects of the city’s near-term export performance, said the organisation, adding that readings above and below 50 indicate an optimistic or pessimistic outlook respectively.
"As the initial shock of the COVID-19 pandemic begins to wane, the number of exporters having orders cancelled, payments deferred or logistics and distribution disrupted showed a significant drop compared with the previous quarter," said Nicholas Kwan, HKTDC Director of Research.
- 60.5% of survey respondents indicated that reduced orders from buyers was the biggest challenge they faced, up 3.5 percentage points from the second quarter of 2020.
- A number of exporters (23%, up 4.9 percentage points) said they had to downsize their companies and in some cases lay off workers.
- Fewer respondents (51.5%, down 13.1 percentage points) regarded the continuation of the pandemic as the biggest threat to their export performance over the next six months
- More respondents are concerned about softening global demand (21.5%, up 2.5 percentage points) and trade tensions between the United States and China (15%, up 4.2 percentage points)
- Export indexes for all major sectors rose from their lowest readings in the first half of 2020, especially the machinery sector (29.0), toys (27.5) and electronics (25.3), followed by timepieces (21.6), clothing (21.0) and jewellery (20.1).
- Exporters’ perception on the performance of major markets remained largely unchanged, with Japan (46.1) and Mainland China (42.9) regarded as the most promising markets for Hong Kong exports, followed by the United States (41.2), the Association of Southeast Asian Nations (ASEAN) bloc (41.0) and the European Union (36.0)
- The Procurement Index, Offshore Trade Index and Trade Value Index all began to stabilise in the third quarter whereas the Employment Index dropped by 2.3 points to a four-year low of 39.8.