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| Tuesday, 16 December 2014, 17:50 HKT/SGT | |
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Source: HKTDC | |
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| Exporters Optimistic about Medium Term Prospects |
HONG KONG, Dec 16, 2014 - (ACN Newswire) - The value of Hong Kong exports is expected to grow by 3 per cent next year, according to the Hong Kong Trade Development Council's (HKTDC) latest forecast. The growth will be driven by increased export volume, while unit value is expected to remain unchanged from 2014.
 | | Hong Kong Exports to Grow 3% in 2015 |
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Speaking at today's press conference, HKTDC Director of Research Nicholas Kwan said Hong Kong exports would increase moderately in 2015, benefitting from a mild improvement of the world economy. "In volume terms, Hong Kong exports are projected to expand at a faster rate, a testament to stronger overseas demand for a number of Hong Kong products," Mr Kwan said.
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Value Volume Unit Value Change
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2014 (estimate) +4% +2% 2%
2015 (forecast) +3% +3% 0%
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Mr Kwan added that softening oil and commodity prices would assist the global recovery, while dwindling prices for raw materials, coupled with continued consumer conservatism, should ease the upward pressure on the unit values of Hong Kong exports. "Importers and retailers maintain their cautiousness in terms of order size, lead time and pricing," Mr Kwan said. "It would be difficult for Hong Kong manufacturers to raise the price. Evidently, the recent protests in Hong Kong have yet to show any lasting impact on the order placement and sourcing practices of overseas buyers."
Further Growth in Emerging Markets
Mr Kwan highlighted the rapid growth in Asian trade in 2014. In the first 10 months of the year, Hong Kong exports to ASEAN jumped 8.3 per cent. "Outside developing Asia, other emerging markets fared even better, with exports to Africa surging 34 per cent, the Middle East 23 per cent, emerging Europe up some 10 per cent and Latin America also up 10 per cent," Mr Kwan said. Product-wise, electronics exports grew by 6 per cent year-on-year while timepieces and jewellery increased 6 per cent and 3 per cent respectively.
Hong Kong's exports to emerging markets will grow further in 2015, according to Mr Kwan. "The launch of the ASEAN Economic Community by end-2015, with more than 600 million consumers in this single market, creates new opportunities for Hong Kong exporters," he said.
He added that Indonesia, Myanmar, Vietnam and India have the greatest potential among emerging Asian countries while the outlook for Brazil and Mexico is better than other economies in Latin America. In emerging Europe, Poland, Hungary, the Czech Republic and Turkey are outperforming other countries. "And for the Middle East and North Africa, Hong Kong exporters should leverage Dubai's entrenched role as a regional trading hub to attract buyers and importers in the region," Mr Kwan said.
Mixed Outlook for Mature Markets
The global economic recovery should remain modest and uneven in 2015. "Among the developed economies, the US is expected to lead the pack, with growth momentum largely underpinned by falling unemployment, steady payroll gains, an improving housing market, better household balance sheets and stronger consumer confidence," Mr Kwan said. By contrast, the Eurozone is unlikely to improve significantly due to lingering high jobless rates, tight budgets and sustained deleveraging pressures across the region.
Mr Kwan said the UK should see more solid growth momentum as demand will be reinforced by improving employment figures and a strong property market. In Japan, Abenomics will be entering a critical phase in 2015, when the early recovery momentum unleashed by aggressive monetary easing and fiscal stimulus will need to be sustained by structural reforms as the impact of a weakening Yen remains unclear. Mr Kwan offered the following analysis of individual industries:
- Electronics: It accounts for some 60 per cent of Hong Kong's total exports, and will remain the engine for growth amid the prevalence of smart devices, especially for consumer wearables. According to the onsite survey at the HKTDC Hong Kong Electronics Fair (Autumn Edition) in October, 92 per cent of buyers and 90 per cent of exhibitors said they expect their sales to increase or remain unchanged in 2015.
- Watches and Clocks: Sales of higher-end items are projected to perform somewhat better on the back of a healthier consumer appetite, while demand of less expensive items like fashion watches should hold up well amid general stickiness to cost-conscious spending. "Spurred by the growing popularity of wearable technology, there are also decent sales prospects for smart watches that can link up with a smart phone, track a person's movement, as well as measure health signs," Mr Kwan said.
- Jewellery: As with timepieces, the consumer appetite for jewellery will become stronger as the global economy rides out the headwinds. While likely securing more orders, Hong Kong exporters will have to struggle with the fluctuating costs of precious stones and metals.
- Garments: While consumers are gradually resuming spending on fashionable products, the spotlight will likely stay on items that offer comfort, function and value-for-money. The rise of emerging production bases including Bangladesh, Indonesia, Vietnam, Cambodia and Myanmar, will continue to bring new challenges to Hong Kong clothing exports.
- Toys: Improving economic conditions in overseas markets will stimulate toy sales. Although the booming online game sector remains a huge and growing competitor, smart toys and educational playthings are much sought after. "As Hong Kong manufacturers are deemed more capable of meeting the stringent overseas regulatory requirements on toy safety, sourcing from other production bases is less likely," Mr Kwan said.
Medium Term Optimism
The HKTDC also unveiled its Hong Kong Export Index for the fourth quarter of 2014. The Index, which measures exporters' confidence, dropped 3.5 points to 38.5. The HKTDC's Principal Economist (Global Research) Daniel Poon, said the Export Index's dipping below the 50-point line, the level between expansion and contraction, indicates that enterprises are pessimistic about Hong Kong exports in the short term.
Although the index for a variety of industries fell in the fourth quarter of 2014, the pessimistic sentiment for jewellery and machinery was relatively milder, with Index ratings of 42.8 and 42 respectively. Among the major markets, exporter confidence in the US, the EU and Japan has dropped slightly while sentiment towards the Chinese mainland shows a slight improvement compared to the previous quarter.
Mr Poon added that the Trade Value Index had edged down from 56.2 in first quarter of 2014 to 48.7 in the fourth quarter, indicating the drop in unit prices, especially clothing. In addition, the Procurement Index also fell to 46.7. It is the second consecutive quarterly decline below the 50 mark, reflecting the continuing negative procurement sentiment.
Yet, Hong Kong exporters are more optimistic about the medium term. "For 2015 as a whole, 73 per cent of respondents expect their sales to increase or remain unchanged," said Mr Poon.
Photo Download: http://filesharing.tdc.org.hk/hktdc/download.php?fid=_phpS2nlT5
Reference Materials
HKTDC Research: www.hktdc.com/research
Hong Kong Export Prospects 2015: Progress Against Continued Headwinds: http://bit.ly/1sfczZJ
Exporters Optimistic for 2015, Despite Short-term Fall in Confidence: http://bit.ly/1zSN9jq
HKTDC Business-Stat Online (BSO): http://bit.ly/1yBRD0R
Contact:
HKTDC
Corporate Communication Department
Joe Kainz
Tel: +852 2584 4216
Email: joe.kainz@hktdc.org
Topic: Trade Show or Conference
Source: HKTDC
Sectors: Trade Shows, Daily Finance, Daily News
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