This Aug 4, 2023 photo shows part of the dock complex at Kwai Tsing in Hong Kong. (SHAMIM ASHRAF / CHINA DAILY)

Hong Kong exporters are regaining business confidence, as shown by the latest export index released by the Hong Kong Trade Development Council, which saw respondents’ market expectations surpass the present business sentiment. 

The HKTDC Export Confidence Index released on Tuesday showed that the overall score of 47.4, which measures exporter sentiment about the upcoming quarter, exceeds the current performance reading of 39.6.

According to the HKTDC, 70 percent of the respondents anticipate a recovery in growth in their external main markets, with the Chinese mainland and the United States having the most promising outlook. 

Hong Kong’s overall exports have been on an upward trend since September, driven by a recovery in the electronics sector

Irina Fan, Director of research, HKTDC 

The HKTDC created the index to gauge local traders’ outlook on near-term export performance. A total of 500 Hong Kong exporters from six major industry sectors, including clothing, electronics, jewelry, machinery, timepieces, and toys, were interviewed for the index survey in the first quarter. Nevertheless, a reading below 50 indicates a pessimistic outlook.

The closest to expansion territory was the subindex in sales and new orders, which read 49.9 points, reflecting exporters’ improving confidence in business demand. The four other subindices are trade value, cost, procurement and inventory.

The value of Hong Kong’s total exports fell 0.8 percent year-on-year to HK$284.1 billion ($36.3 billion) in February, according to the latest statistics released by the Census and Statistics Department on Tuesday. 

Exports to the Chinese mainland and the US rose, while those to the European Union declined. Meanwhile, a mixed performance was shown in exports to major Asian markets.

HKTDC had earlier forecast that Hong Kong’s exports would grow 4 percent to 6 percent this year.

Economic risks remain the top concern for most surveyed exporters, with 83.3 percent viewing a recession or a slowdown in their main overseas markets as the biggest challenge to business growth for the next 12 months. 

Meanwhile, 63 percent of the respondents said they are concerned about rising transportation costs, the index survey showed.  

Irina Fan, director of research at HKTDC, said Hong Kong’s overall exports have been on an upward trend since September, driven by a recovery in the electronics sector. 

Acknowledging challenges in Hong Kong’s interest rate environment despite the US Federal Reserve’s expected rate cuts, Fan said exporters could still take advantage of declining financing costs, with a weaker greenback enhancing the competitiveness of pricing in the Hong Kong dollar.

Looking ahead, Cherry Young, a senior economist at HKTDC, said that growing demand from the Chinese mainland and e-commerce will provide key momentum for the city’s exports amid global headwinds.