Hong Kong exporter confidence records steepest drop in 2 years Confidence among Hong Kong’s exporters fell at its steepest rate in two years amid global trade turbulence even as demand was expected to remain stable over the long term. The Trade Development Council (TDC) on Tuesday said its Exporters Confidence Index for the first quarter of 2026 showed that traders remained “cautious”, though trade diversification strategies have them “well prepared” for any further market disruptions. The index surveys over 500 traders from six major industries on a quarterly basis to measure their near-term export performance. A score above 50 indicates expansion or optimism while a score below that threshold indicates a pessimistic or downward trend. The index is split into two key indicators – one measuring current performance and the other measuring expectations. For the first quarter of 2026, the current performance index was 46.5, down from 51.4 in the fourth quarter of 2025. The expectation index, meanwhile, fell to 46.9 from 51.9 over the same period. Both indexes experienced the largest quarter-over-quarter drop since the survey was launched in the first quarter of 2024. The expectation index reading was the lowest on record, while the current performance index was the second-lowest. The market outlook for some of Hong Kong’s largest trading partners also softened in line with the overall performance. Japan saw the biggest plunge in current performance, from 56.4 in the fourth quarter of 2025 to 36.1 in the first quarter of 2026, coinciding with the ongoing political fallout between Beijing and Tokyo. Asean, which has become a key destination for trade diversification amid the Sino-US trade war, declined from 58.9 to 46.9. Mainland China also fell from 57.2 to 42.7. In specific sectors, the current performance of clothing exporters rose from 46.0 to 52.1, while jewellery also improved from 51.2 to 57.1. Electronics exporters, meanwhile, saw a drop from 52 to 44.9. Among subindexes, sales and new orders logged the biggest drop from 55.6 to 44. Meanwhile, cost pressures improved from 22.9 to 38.1. “The outlook for many of Hong Kong’s major markets has moderated somewhat, including the Asean bloc and the Chinese mainland, largely on account of ongoing geopolitical developments,” TDC director of research Bruce Pang Ming said. “In the longer term, however, fundamental demand – especially for electronics and other consumer sectors – remains resilient. Hong Kong’s trade prospects should stay positive, yet remain cautious, pending the further easing of global geopolitical conflicts.” The latest survey was conducted over January and February and ended before the US Supreme Court’s February 20 ruling that struck down President Donald Trump’s signature global tariff policy which had roiled markets last year. Trump then implemented a 10 per cent global tariff through a never-before used section of the country’s trade act, and days later launched a war – along with Israel – against Iran, further disrupting markets and global trade. Asked whether the findings were still relevant given these developments since the survey was conducted, Pang said there were still many uncertainties over policies in the United States. He said the impact of the war on the market would depend on the conflict’s trajectory over the short and long term. Currently, the pressure was mostly on the supply side – such as disruptions to shipments by air – rather than demand. But improvements in cost pressures as shown in the index should provide traders with a “buffer” from disruptions such as rising oil prices, he said. Trade diversification strategies had also made them “well prepared” for possible disruptions, he added. Hong Kong’s externally-oriented economy has proven to be resilient despite disruptive changes to the global trade environment and geopolitical turmoil. Gross domestic product grew 3.5 per cent last year, driven partly by an increase in exports, beating expectations. In his latest budget, Financial Secretary Paul Chan Mo-po forecast momentum would continue into 2026, with an estimated growth of between 2.5 and 3.5 per cent, while warning that uncertainties would continue to “loom” over global trade. https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3348560/hong-kong-exporter-confidence-records-steepest-drop-2-years?pgtype=live (ICE HONG KONG)

Fonte notizia: South China Morning Post