The Hong Kong Trade & Development Council (HKTDC) in a recently published article in the HKTDC Research section, has taken a look at the global economy and some internal factors to make some predictions about the outlook for Hong Kong exports in 2019 of various products. 

“Despite growing trade friction, the global economy continued to pick up in 2018,” the report stated. “Hong Kong’s export performance continued its pace from 2017, supported by synchronized recovery in most major economies.”

The research found that the Sino-US trade dispute has not yet had a major negative impact on Hong Kong’s exports. This was due to a fundamentally strong demand; as well as a result of some exporters opting “for earlier shipment in order to pre-empt the implementation of the tariffs”.

In the first 10 months of 2018, Hong Kong’s total exports grew by 9.8% year-on-year (y-o-y). This followed an 8% increase in 2017 as a whole. “In terms of markets, the growth of Hong Kong‘s exports was broadly based with regards to its traditional export destinations, with trade with the US and the EU significantly up, while its exports to Japan were the lowest among all its major markets,” the report said.

It added: “With regards to developing Asia, exports to China and the ASEAN bloc maintained their momentum, partly down to the region’s extensive production network and partly on account of rising demand for consumer goods. Outside developing Asia, a number the other emerging markets recorded more impressive growth, with exports to emerging Europe up 34%, Latin America 16% and Africa 16%.”

However, product-wise, various segments showed differentiated growth patterns. Exports of electronics was up 14% y-o-y during in first 10 months of 2018, accounting for about 68% of Hong Kong’s total exports – thus remaining the primary driver of growth.

While the timepiece sector recorded only a marginal increase, exports of high-end jewellery showed the highest growth for the period in question, amongst the various products which make up HK’s export basket.

Coming to prognostications for the future, the report said: “Given the continuing momentum of global economic growth, and the recent progress in Sino-US trade negotiations, we are cautiously optimistic about the prospects for Hong Kong’s export performance, expecting a 5% growth in exports in 2019. This forecast is supported by our latest HKTDC Export Index survey, in which 51% of the exporters surveyed said they expected their sales to increase or remain unchanged over the coming year. The survey also found that 57% of exporters believed that their unit prices would increase or remain unchanged.”

The outlook for jewellery however, comes with a caveat. “Less robust economic growth is likely to affect Hong Kong’s jewellery exports,” the article states. “Growing conservatism among consumers may weaken demand for high-end items, although the rising popularity of accessible items that feature good branding, design, quality and craftsmanship may help support jewellery sales. Demand for gold jewellery is likely to be propped up by the consumer appetite for gold in major markets such as mainland China and India. Other jewellery, including platinum and diamonds, may also remain popular.”