The Hong Kong Trade Development Council on Thursday revised its latest export forecast for 2024 upwards to a range of 9 to 11 percent.
The forecast is higher than the previous estimate of 4 to 6 percent growth. The improved projection stems from the council’s review of export levels from January through May and its export confidence index.
The value of Hong Kong’s total exports of goods rose 12.5 percent in the first five months of the year. A key driver was a 15.5 percent surge in electronics exports, which comprise 70 percent of Hong Kong’s total export value.
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Hong Kong’s total exports in May increased 14.8 percent over the previous year to HK$375.9 billion ($48.14 billion), which is the third rise after a drop in February, according to the Census and Statistics Department on Tuesday.
A spokesperson for the Hong Kong Special Administrative Region government said, “Exports to the mainland and the United States continued to rise notably, while those to the European Union turned to an increase. Those to many other major Asian markets also saw growth.”
More specifically, the Chinese mainland and the Association of Southeast Asian Nations have a high demand for electronic parts and components, together contributing more than 60 percent of Hong Kong’s total exports.
Both the current and expectation indexes of the HKTDC Export Confidence Index for the second quarter of 2024 now exceed 50, indicating an optimistic outlook.
The overall expectation index is 54.3, which measures exporter sentiment about the upcoming quarter, surpassing the current performance reading of 51.6. The subindex in sales and new orders saw the most expansion to 59.4 points, reflecting greater confidence in business demand. The four other subindexes are trade value, cost, procurement, and inventory.
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 industries, including clothing, electronics, jewelry, machinery, timepieces, and toys, were interviewed for the index survey in the first quarter.
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Rising transportation costs have become the top concern for most surveyed exporters, followed by high capital costs and exchange-rate fluctuations.
“The conflicts in the Red Sea and other regions brought a lot of challenges to sea cargo logistics,” said Irina Fan Yuen-yee, director of research at HKTDC. Consequently, high value-added cargo logistics and multimodal transport are playing increasingly important roles, she said.
In 2023, sea cargo logistics accounted for 10.1 percent of total exports, and air and land cargo logistics accounted for 41.5 percent and 45.7 percent respectively, according to HKTDC.
While Fan acknowledged geopolitical tension, rising costs and exchange-rate fluctuations are affecting the global economy, she expects Hong Kong’s positive export performance to continue for the rest of the year.
