Hong Kong traders cautious on US-China trade dispute but unfazed by Brexit

Source: DHL Express Hong Kong and compiled by the Hong Kong Productivity Council

Hong Kong-based traders who use airfreight remain cautious due to the ongoing US-China trade dispute but are are optimistic that the situation will be resolved in the next quarter.

That was one key highlight from the latest DHL Hong Kong Air Trade Leading Index (DTI) which has published its results for the second quarter (Q2) of 2019.

The index, and compiled by the Hong Kong Productivity Council, analyses the key attributes of business demand based on a survey of more than 600 Hong Kong companies that focus on inbound or outbound air freight consignments.

The Q2 survey found the optimism on US-China trade relations was “further fueled by the growth prospects” brought on by the development of the Hong Kong Greater Bay Area.

A spokesperson for DHL Express Hong Kong, which commissions the report, said: “Outlook on air exports and imports only exhibited a slight downturn from the previous quarter due to lower demand from the Americas and Europe, which has somewhat tempered the stronger demand in Asia Pacific.

“While markets in the Americas and Europe have seen small dips from the previous quarter, Asia Pacific has shown signs of confidence from traders. The Rest of the World has surged significantly, attributed to the sharp recovery in Product Variety.”

Demand for both imports and exports of food and beverage has strengthened, according to the report, as it remains the “top commodity” traded this quarter. Apparel & Clothing Accessories, Electronic Products & Parts, as well as Watches, Clocks & Jewellery dropped slightly due to slower demand in the Americas offsetting the improvements seen in the European and Asia-Pacific markets.

While it continues to have significant impact in the UK, only “a small percentage of air traders” in Hong Kong are concerned about Brexit. Most of the air traders surveyed are focusing on the benefits that the Greater Bay Area will bring in terms of infrastructure, innovation and trade.

The first quarterly DTI was released in Q2 2014. An index value above 50 indicates an overall positive outlook while a reading below 50 represents an overall negative outlook for the surveyed quarter. The further the reading is from 50, the more positive or negative the outlook is.