Business, Freight News, Logistics

Hong Kong Expects 2% export volume growth in 2016

[ January 11, 2016   //   ]

Weak global economic growth will likely put pressure on the value of Hong Kong exports next year, according a study by the Hong Kong Trade Development Council (HKTDC). While the city’s export volume will increase by 2% in 2016, HKTDC Research expects slow growth and a strong US dollar could lead to a 2% drop in export, leading to flat growth in export value in 2016.

“Although the global economy faces multiple challenges, Hong Kong exporters should not be overly pessimistic about the year ahead,” said HKTDC Director of Research Nicholas Kwan. He noted that recent fluctuations in global trade are expected to stabilise gradually, with individual countries and regions such as the United States and ASEAN, expected to post moderate growth next year. The global trade improvement will help Hong Kong’s exports, which will see “falling prices and increasing volumes,” he said.

Kwan added that as oil and commodity prices remain weak on the back of a strong US dollar, spending overseas will stay conservative. He noted that retailers and importers will be very cautious with their order quantities, delivery dates and pricing, resulting in downward pressure on prices. “The threat of global deflation, volatility in the financial markets, growing geopolitical tensions, and concerns about terrorist attacks are all challenges and risks confronting Hong Kong exporters,” said Kwan.
US Leads Mature Markets
Among Hong Kong’s traditional markets, only exports to the United States recorded growth of 1.2% in the first 10 months of this year, while the European Union and Japan fell 3% and 6.6%, respectively. Emerging markets performed better, with export growth in Africa and ASEAN rising 21.4% and 6.5%, respectively. Exports to Latin America (+4.5%) and the Middle East (+1.6%) rose modestly, while those to the Chinese mainland dropped 2.5%.

Kwan said the US will continue to outperform other traditional markets, boosted by a falling unemployment rate, stable wage growth, a recovering real estate market, improving household balance sheets, and strong consumer confidence. As a result, the US Federal Reserve may further tighten its monetary policy. With the US presidential election next year, Kwan predicted that trade tussles may arise between the mainland and the US, which could affect Hong Kong’s export performance. In Japan, Kwan expects the sustained softening of the yen to weaken Japanese imports of consumer goods.