Hong Kong’s economic recovery is expected to gather pace in the second half of 2023, with exporter confidence rose to a two-year high in the second quarter of the year, while traders are also seeing an improving outlook in terms of profitability, according to the 2Q23 Hong Kong Export Index survey conducted by HKTDC Research.
Nevertheless, business sentiment remains cautious, with many companies still concerned about the challenging external environment and weakened demand in their overseas markets. Indeed, a 16.5% year‑on‑year decline of Hong Kong’s total exports was recorded for the period January-April 2023, implying a slower-than-expected recovery.
Exports Fell Amid Uncertainties
The decline in Hong Kong’s total exports performance to date can be attributed to several factors, including weaker-than-anticipated global demand, slower-than-expected recovery in cross-border land transport capacity, a longer-than-expected downcycle in the electronics sector, and heightened trade friction among major economies.
Specifically, high inflation took a toll on consumer spending in many parts of the world. Demand for consumer electronics products, such as mobile phones and computers, was subdued, with the problem exacerbated by the surplus inventory that has accrued over the past two years.
Jewellery Segment Continued to Lead
Following the success in the second half of 2022, Precious Jewellery saw sustained export performance and performed the best overall in January to April 2023, largely on account of strong demand from Mainland China (with exports up 31.7%) and Macao (up 42%). This has been seen as a consequence of both a post‑pandemic spike in jewellery demand and the influx of high‑spending tourists that followed the lifting of the strict border controls.
Improving Export Outlook
Looking ahead to the second half of 2023, it appeared that the rate of economic recovery will continue to accelerate. It is expected to be more moderate, given the weaker‑than‑expected trade performance. The latest indicators point to a stronger rebound later in the year, with that momentum expected to be sustained in 2024.
With many traders taking a wait-and-see approach, HKTDC Research has, therefore, revised its forecast for Hong Kong’s 2023 export growth, with the figure falling from its earlier estimate of 5% to 0‑2%.
Despite challenges in the macro environment, you can still take advantage of our e-Marketplace by extending your reach to global traders beyond physical borders. Act now to secure new business by clicking below banners:
