HK export confidence grows, but labour costs, higher-value RMB, trade tensions worry

HONG KONG - The confidence level among Hong Kong exporters continues to rise, in line with strengthening of global economic activity, according to the latest HKTDC Export Index, which found that, for the first quarter of 2018, the Index stood at 49.4, up 4.8 compared to the fourth quarter of 2017.

The timepiece industry outperformed all other sectors, with a 57 Index reading, a significant rise of 15.8 from the previous quarter. This was followed by machinery and toys, which recorded 53.8 and 51.4 respectively.

 
HKTDC Director of Research, Nicholas Kwan, said that following the rise of Hong Kong’s total exports last year by 8% to HK$3875.9 billion, the momentum continued during the first quarter of 2018. But he noted that local companies continue to face business challenges.
 
Sixty per cent of respondents experienced soaring labour costs in the past three months; while nearly 70% said they face more challenges from the continuing appreciation of the renminbi.
 
“At this stage, the Sino-US trade conflict has limited impact on Hong Kong’s export performance. Instead, the appreciation of the renminbi and soaring labour costs have a more direct impact on local exporters,” he said.

Billy Wong, HKTDC Principal Economist (Greater China), said that Hong Kong businesses expressed confidence about prospects in major export markets, particularly the Chinese mainland, with the index rising 2.1 to 50.3, followed by the United States (50.2) and Japan (50). The index for the European Union rose from 47.5 to 49.1.  http://research.hktdc.com/ (ATI).