SMEs in Hong Kong cautious on global air trade outlook, DHL

WEAK demand from Europe and decreasing trade of high value commodities has driven the air trade outlook down for two straight quarters, according to DHL Hong Kong's first Air Trade Leading Index (DLI) for local enterprises and SMEs.

The overall drop revealed by the index is indicative of cautiousness among air traders about the outlook of the global economy, reports the express delivery firm that is a member of the Deutsche Post group.

Compiled by the Hong Kong Productivity Council (HKPC) and based on a survey of 600 companies, the index aims to provide a forward looking perspective on overall air export and import trade volumes by analysing sales volume, product variety and shipment urgency.

It also focuses on regional market segments, measured by air shipment volume by various trade lanes. Sentiment regarding the five key types of air freight commodities was also examined.

In the fourth quarter, DTI, representing the overall air trade volume index, posted at 51.6, 0.7 points lower than the third quarter.

The export index fell by 1.2 points to 49.5, attributable to declining sales orders and fragile demand especially from Europe, emerging markets and dwindling high value commodities trade.

The import index, however, showed a slight improvement shifting to 55.0 from 54.5 in the previous quarter, driven by modest demand for food and beverage.

Product variety had the highest reading at 58 points, followed by sales volume (55 points) and shipment urgency (52 points), all down against Q3 figures.

Air traders were generally positive about pre-Christmas orders boosting product variety.

Business sentiment declined unevenly across trading markets, albeit all still scoring above 50 points and so remaining positive.

An uncertain outlook for Europe and emerging economies has dampened exporters' confidence to trade with these markets. On the other hand, importers indicated that local demand for Asia imports remains robust.

Traders were confident of growth in food and beverage sales with import from the European market climbing three quarters in a row, and also the outlook for electronics and related parts.

However, weak demand was anticipated for apparel and clothing (50 points) and luxury goods (47 points), and especially gifts/toys and houseware imports which fell more than 10 points from 59 in Q3 to 47, attributable to cooling retail sales.

"DTI provides a valuable reference for local businesses, especially SMEs that did not previously have access to such informative data to help them assess the outlook of their markets and devise business strategies and tactics accordingly," said executive vice president commercial, Asia Pacific, Ken Lee.