Dec 16, 2021 18:00 JST
Source: HKTDC
|
|
HKTDC Export Index 4Q21: Hong Kong export growth set to slow to 8% in 2022
COVID-19 volatility and spiking logistics costs impact sentiment
HONG KONG, Dec 16, 2021 - (ACN Newswire) - The Hong Kong Trade Development Council (HKTDC) forecasts that Hong Kong exports will grow by 8% in value in 2022, down from the 25% expansion experienced in 2021. An uneven recovery, lingering threats from the COVID-19 pandemic, global supply chain disruptions and logistics bottlenecks, as well as rising concerns over inflation, are expected to restrain growth, HKTDC Director of Research Nicholas Kwan said.
| HKTDC Director of Research Nicholas Kwan and Assistant Principal Economist (Greater China) Alice Tsang announced the HKTDC Export Index for the fourth quarter of 2021 and gave the HKTDC’s prediction for export growth in 2022 at a press conference today. |
In the most recent HKTDC Export Index survey, more local exporters (87%, up 20.4 percentage points from the previous quarter) said the pandemic had negatively affected their business. Soaring transport costs (60.2%), disruptions to logistics and distribution (53.2%) as well as difficulties in sourcing raw materials/parts and components (41.4%, up 16.8 percentage points) were cited as major impacts. More than 70% of Hong Kong exporters said they expect 2022 sales will decrease (42.6%) or just be on par (29.1%) with sales this year.
COVID-19 remains biggest threat
In the first 10 months of 2021, Hong Kong exports surged 26.7% year-on-year, albeit from a low base. "The remarkable growth outshone the global average, demonstrating the resilience of the city's export sector. Nonetheless, lingering pandemic and market uncertainties are likely to cast a shadow on the local export performance in the coming year," Mr Kwan said.
He added that the impact of COVID-19 (32.5%) remains local exporters' top concern, followed by a stuttering economic recovery (15.7%) and borders remaining closed (11.6%).
From 'just-in-time' to 'just-in-case'
Mr Kwan said COVID-19-related delays in shipments and issues related to port closures and congestion have adversely impacted the global supply chains in many areas. While 71.3% of respondents reported delivery delays, 39.8% experienced production schedule disruption and 38.4% passed extra shipping costs on to customers. Many exporters (62.4%) expect logistics costs to continue rising in the first quarter of 2022, with 39.8% anticipating an increase in the range of 10-30%.
He said manufacturers may reserve more buffer time for production in the pandemic recovery period. "Take the automobile industry as an example, where companies are switching from a 'just-in-time' strategy, with semiconductor chips, parts and components only delivered as needed, to embracing a 'just-in-case' strategy where they stock up on inventory to combat logistics bottlenecks."
New products, new markets
On the bright side, the Regional Comprehensive Economic Partnership (RCEP) agreement takes effect on 1 January 2022. "With its phased tariff elimination, the RCEP is set to further develop and integrate regional supply chains, as well as encourage production specialisation in Asia. This will provide a fresh impetus for Hong Kong to fortify its role as an international trading hub," Mr Kwan said.
Considering business strategies in 2022, almost half of the exporters surveyed (46.4%) indicated they planned to develop other product categories, with some opting to develop domestic markets in Mainland China (33.8%) or diversify sales to other overseas markets (30.5%).
Toy sector bearish
Meanwhile, the HKTDC Export Index dropped 1.8 points to 37.2 in the final quarter of 2021, "indicating that growing market uncertainties triggered by COVID-19 variants may continue to undermine local exporters' confidence in the near term," said HKTDC Assistant Principal Economist (Greater China) Alice Tsang.
Machinery (44.1, up 0.3 points) was the most promising sector, jewellery (40.7. up 0.8) and clothing (39.6, up 3.5) improved, while toys, down 19.0 points to 25.0, was the least optimistic sector. Exporters were equally cautious on major markets. Mild growth was expected in the Association of Southeast Asian Nations (ASEAN) bloc (45.8, up 1.3) and Japan (48.7, up 0.8), while the mainland market remained stable (47.6, down 0.2) and the United States fell 1.4 points to 42.9.
The Procurement Index and the Employment Index were more or less the same as the previous quarter, at 36.9 and 44.0 respectively. The Trade Value Index (57.0) remained in expansionary territory.
A total of 500 local traders from six major industry sectors including clothing, electronics, jewellery, machinery, timepieces and toys were interviewed for the HKTDC Export Index survey in mid-November. Readings above 50 indicate a positive sentiment, while below 50 is negative.
References - HKTDC Research website: http://research.hktdc.com/ - HKTDC Export Index 4Q21: Exporter Sentiment Declines as Covid-19 Resurges and Logistics Costs Spiral https://bit.ly/3yC337H - Hong Kong Export Outlook for 2022: Moderate Growth Amid Lingering Risks from Covid-19 and Growing Threats of Inflation https://bit.ly/3EWwN1b - Podcast https://bit.ly/3pXDPfJ - Photo download: https://bit.ly/3pWHKJQ
About HKTDC
The Hong Kong Trade Development Council (HKTDC) is a statutory body established in 1966 to promote, assist and develop Hong Kong's trade. With 50 offices globally, including 13 in Mainland China, the HKTDC promotes Hong Kong as a two-way global investment and business hub. The HKTDC organises international exhibitions, conferences and business missions to create business opportunities for companies, particularly small and medium-sized enterprises (SMEs), in the mainland and international markets. The HKTDC also provides up-to-date market insights and product information via research reports and digital news channels. For more information, please visit: www.hktdc.com/aboutus. Follow us on Twitter @hktdc and LinkedIn
Media enquiries: HKTDC's Communication and Public Affairs Department Beatrice Lam, Tel: +852 2584 4049, Email: beatrice.hy.lam@hktdc.org
Source: HKTDC Sectors: Daily Finance, Daily News, Funds & Equities, Local Biz
Copyright ©2024 ACN Newswire. All rights reserved. A division of Asia Corporate News Network.
|
Latest Release
Mitsubishi Power Begins Commercial Operation of Seventh M701JAC Gas Turbine in Thailand GTCC Project; Achieves 75,000 AOH To-Date Apr 24, 2024 17:19 JST
| MC and Denka Sign J/V Agreement in Fullerene Business Apr 24, 2024 17:02 JST
| Mitsubishi Motors Posts Record Sales in the Philippines in FY2023 Apr 24, 2024 13:56 JST
| NEC Develops High-speed Generative AI Large Language Models (LLM) with World-class Performance Apr 24, 2024 13:25 JST
| Fujitsu SX Survey reveals key success factors for sustainability Apr 23, 2024 10:25 JST
| Fujitsu and METRON collaborate to drive ESG success: slashing energy costs, boosting productivity with new manufacturing industry solutions Apr 22, 2024 16:09 JST
| NEC Strengthens Commitment to Space Industry with Investment in Seraphim Space Venture Fund II Apr 22, 2024 15:09 JST
| Soft Space Launches the First and Only JCB Payment Gateway in Malaysia Apr 22, 2024 15:00 JST
| TOYOTA GAZOO Racing takes a one-two in Croatian thriller Apr 22, 2024 10:47 JST
| First-ever Mazda CX-80 Crossover SUV Unveiled in Europe Apr 19, 2024 13:50 JST
| Fujitsu develops technology to convert corporate digital identity credentials, enabling participation of non-European companies in European data spaces Apr 19, 2024 10:17 JST
| Mitsubishi Heavy Industries and NGK to Jointly Develop Hydrogen Purification System from Ammonia Cracking Gas Apr 18, 2024 17:01 JST
| Toyota Launches All-New Land Cruiser "250" Series in Japan Apr 18, 2024 13:39 JST
| Fujitsu and Oracle collaborate to deliver sovereign cloud and AI capabilities in Japan Apr 18, 2024 11:14 JST
| Eisai: Research on Treatments for Alzheimer's Disease Based on Its Pathological Mechanisms Recieves Award for Science and Technology (Research Category) Apr 18, 2024 10:53 JST
| All-New Triton Confirmed as First Double-Cab Pickup Truck to Achieve 2024 Five-Star ANCAP Safety Rating Apr 18, 2024 09:22 JST
| Eisai's Antiepileptic Drug Fycompa Injection Formulation Launched In Japan Apr 17, 2024 16:17 JST
| Honda Unveils Next-generation EV Series for China Apr 17, 2024 12:15 JST
| Lexus presents Time at the 2024 Milan Design Week Apr 16, 2024 18:49 JST
| Mitsubishi Corporation Announces Participation in a DAC Project in Louisiana, USA Apr 16, 2024 14:36 JST
|
More Latest Release >>
|