Hong Kong exporters have started the year on an upbeat note, in spite of the turbulence and uncertainty in global trade.
Exporter optimism about their current and near-term business prospects experienced a modest boost from Q4 2024 to Q1 2025, even as US tariffs stoked up trade tensions, according to a recent survey conducted by the Hong Kong Trade Development Council (HKTDC).
Findings from the 1Q25 HKTDC Export Confidence Index, released this week, show increases across both the Current Performance Index, which measures actual performance, and the Expectation Index, which gauges likely performance in the coming quarter.
This is largely due to a broad improvement in sales and new orders, procurement activity and sales prices.
For the first quarter of 2025, the Current Performance Index rose by 1.8 points to reach 52.1, while the Expectation Index notched up 1.0 points to 51.0.
Both readings were above the watermark level of 50, reflecting general positivity in the industry.
HKTDC’s survey also found that around 75% of respondents expected net margins to remain stable or increase this year, the highest level recorded in 12 months.
This relatively buoyant mood is a testament to the resilience of Hong Kong’s export sector, noted Irina Fan, Director of HKTDC Research, even as growth forecasts have been dialled down as US tariffs take effect.
“While export business may be growing at a moderately slower rate than had been initially anticipated, there are still many reasons to be optimistic,” Ms Fan remarked.
“This is partly down to the agility and flexibility many Hong Kong exporters have demonstrated in terms of strategies for future-proofing their business activities,” she added.
Hong Kong’s export-oriented businesses have been deploying a range of strategies to offset protectionist measures, including diversifying sourcing, expanding into new markets and relocating production lines.
In terms of Hong Kong’s major export markets, trader sentiment was most positive about Mainland China and the ASEAN bloc.
Confidence in the US has fallen, with both current performance and expectation levels in the latest index sinking to one-year lows.
Given the likely impact of US tariffs, the HKTDC has also adjusted its 2025 Hong Kong export growth forecast from 4% to 3%.
There is still a downside risk to this forecast, as global trade tensions may worsen.
The most positive sector regarding current export performance in Hong Kong was jewellery (at 53.1 points), followed by electronics (52.3) and timepieces (51.2).
In terms of export expectations for Q2, the most optimistic sectors in the city were jewellery (54.4), equipment/materials (52.6) and timepieces (51.1).
The full report for the 1Q25 HKTDC Export Confidence Index is available to read here.
The survey, which aims to provide a comprehensive overview of Hong Kong exporter sentiment, is a composite of five sub-indices covering sales and new orders, trade value, cost, procurement and inventory.
