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HKTDC Export Index 3Q19: Hong Kong Exports Struggle as China-US Trade Tensions Escalate
23 September 2019
- The HKTDC Export Index plunged to 27.4 in 3Q19, the third lowest figure ever recorded. Inevitably, this suggests gloomy prospects for Hong Kong’s export growth over the coming months.
- Overall, every industry sub-index slipped further into contractionary territory. At 28.7, clothing had the highest rating among the key industries, followed closely by machinery (27.8) and electronics (27.4). Jewellery suffered the greatest decline, falling 17.1 points to 21.1.
- It also appears that Hong Kong traders are becoming more negative about the near-term prospects of their major export markets. In line with this, China dropped to a 15-quarter low of 43.2, while the US at 39 was the lowest rated of the major overseas markets.
- The subsidiary indexes, too, showed signs of decline, with the Employment Index falling to 44.0, the Trade Value Index to 38.4 and the Procurement Index to 36.3.
- Inevitably, the continuing trade tensions between China and the US contributed substantially to the prevailing pessimism with regard to near-term export growth. In all, 51.2% of respondents (up 9.9% from 2Q19) believed their export performance had already been adversely affected, the highest proportion to take this view since tracking of the possible consequences began in early 2018.
- The most widespread consequence of the trade dispute was seen as buyers ordering less. Respondents also reported sharing tariff costs with buyers and having orders cancelled.
- Looking ahead, more than half of all respondents (61%) were concerned that the dispute would adversely affect their businesses over the near term. In total, 33.2% of respondents deemed the trade dispute to be the major obstacle to export growth, although a further 30.4% were more concerned with regard to decelerating global demand.
The HKTDC Export Index plunged by 9.9 points to 27.4 in 3Q19, the third lowest figure since the export index was first compiled in 2Q06, ahead only of the 22.3 and 25.8 recorded in 4Q08 and 1Q09 (respectively) at the height of the global financial crisis. With the index clearly in contractionary territory and well below the watershed of 50, this indicates gloomy prospects for Hong Kong’s export growth over the coming months.

Period | HKTDC Export Index | Electronics | Clothing | Toys | Jewellery | Timepieces | Machinery |
3Q19 | 27.4 | 27.4 | 28.7 | 22.2 | 21.1 | 25.5 | 27.8 |
2Q19 | 37.3 | 37.8 | 32.6 | 32.0 | 38.2 | 30.9 | 38.9 |
1Q19 | 39.2 | 39.7 | 32.3 | 41.4 | 33.5 | 35.5 | 42.2 |
4Q18 | 35.2 | 35.9 | 30.3 | 24.3 | 30.5 | 34.0 | 36.6 |
It was also apparent that Hong Kong traders are becoming increasingly negative with regard to the near-term prospects of their major export markets. While Japan continued to be seen as the most promising market at 47.5, this was still down on the 49.6 it was accorded in the previous quarter. For its part, mainland China dropped from 47.4 in 2Q19 to a 15-quarter low of 43.2, while the EU was down 5.5 points to 41.3. At 39, the US was again rated the lowest of the major overseas markets. Overall, the Asian region continued to be viewed as the most promising for Hong Kong exporters.
HKTDC Export Index by Market | US | EU | Japan | Mainland China |
3Q19 | 39.0 | 41.3 | 47.5 | 43.2 |
2Q19 | 42.7 | 46.8 | 49.6 | 47.4 |
1Q19 | 46.1 | 47.4 | 48.0 | 45.7 |
4Q18 | 41.5 | 41.8 | 47.3 | 44.7 |
In line with the lack of confidence in the near-term prospects for overall export growth, Hong Kong exporters were also pessimistic with regard to offshore trade (those shipments not passing through Hong Kong, but handled by Hong Kong exporters), with the Offshore Trade Index returning to the 33.5 level recorded for 1Q19, which was itself a two-year low.

Period | Trade Value Index | Electronics | Clothing | Toys | Jewellery | Timepieces | Machinery |
3Q19 | 38.4 | 38.0 | 40.2 | 37.7 | 39.2 | 37.5 | 43.4 |
2Q19 | 45.1 | 45.3 | 41.4 | 46.1 | 42.0 | 45.1 | 46.3 |
1Q19 | 45.9 | 46.3 | 39.5 | 55.7 | 43.5 | 44.0 | 47.5 |
4Q18 | 44.8 | 44.7 | 44.3 | 46.8 | 38.0 | 43.5 | 49.1 |
The Procurement Index fell to an 11-quarter low of 36.3 in 3Q19, following a drop of 8.6 points from its preceding level of 44.9. In other changes, machinery overtook electronics with its procurement sentiment the most upbeat at 38.1, followed by clothing (37.7), electronics (36.6) and jewellery (30.4). Toys and timepieces, however, both recorded double-digit decreases in procurement expectation, falling to 27.5 and 24 respectively.
Period | Procurement Index | Electronics | Clothing | Toys | Jewellery | Timepieces | Machinery |
3Q19 | 36.3 | 36.6 | 37.7 | 27.5 | 30.4 | 24.0 | 38.1 |
2Q19 | 44.9 | 45.5 | 40.7 | 40.1 | 35.8 | 41.2 | 45.1 |
1Q19 | 44.0 | 43.6 | 46.0 | 55.0 | 38.0 | 46.0 | 43.1 |
4Q18 | 43.4 | 42.2 | 50.0 | 44.3 | 34.0 | 53.0 | 51.9 |
This time round, the Employment Index edged down to 44 from its previous level of 44.8, representing a relatively minor decline in recruitment intentions for the coming months. Overall, electronics was rated the highest in terms of employment prospects, with its reading staying steady at 44.7. Jewellery (43.1), machinery (41.9), toys (40.8) and clothing (39.7) all suffered drops of between 2.2 and 5.9 points, while the biggest decline was recorded for timepieces – a drop of 7.1 to 37. This was its lowest level for 10 and a half years and underlined the distinct likelihood of job losses in the sector.
Period | Employment Index | Electronics | Clothing | Toys | Jewellery | Timepieces | Machinery |
3Q19 | 44.0 | 44.7 | 39.7 | 40.8 | 43.1 | 37.0 | 41.9 |
2Q19 | 44.8 | 44.7 | 45.6 | 45.1 | 45.3 | 44.1 | 46.9 |
1Q19 | 48.9 | 49.7 | 46.0 | 47.1 | 42.0 | 43.0 | 44.4 |
4Q18 | 46.6 | 47.8 | 38.5 | 44.3 | 48.0 | 40.0 | 40.6 |
With the continuing trade tensions between China and the US evidently casting a long shadow over any likelihood of near-term export growth, 51.2% of respondents – up 9.9% from 2Q19 – indicated that their export performance had already been adversely affected by the dispute, the highest proportion to take this view since tracking of the possible consequences began in early 2018. Inevitably the number of respondents maintaining they remained unaffected showed a corresponding decline, falling to 47.8% from 58.3% in the previous quarter.





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