Export growth seen slowing next year

PUBLISHED : Tuesday, 12 December, 2006, 12:00am
UPDATED : Tuesday, 12 December, 2006, 12:00am

Hong Kong's export growth is expected to ease in value from an estimated 8 per cent this year to 6 per cent next year, according to the Trade Development Council.

Domestic exports, which are seen rising by 2 per cent this year, are expected to dip by 10 per cent next year, while the growth of re-exports is likely to drop to 6.5 per cent next year from 8 per cent this year.

The slower projected growth stems largely from the impact of more moderate US consumer spending on global exports although robust mainland trade is expected to continue helping prop up Hong Kong's economy.

'The mainland now accounts for nearly half of the territory's total exports and is projected to chalk up further robust economic growth in 2007,' the council's chief economist, Edward Leung Hoi-kwok said.

The International Monetary Fund forecasts project 10 per cent economic growth on the mainland this year and next, while the US economy is expected to expand by 3.4 per cent this year and ease to 2.9 per cent next year.

The trade outlook for Hong Kong is reflected in the council's export index, which dipped to 49.3 out of 100 in the fourth quarter of this year.

The index has steadily slipped from 59.8 in the second quarter to 56.1 in the third quarter. A reading of below 50 indicates that less than half of the 500 respondents expect their export business to grow in the short term.

The index is based on a telephone survey of 500 traders from the clothing, electronics, toys, watches, jewellery and machinery industries. The six sectors make up about 70 per cent of Hong Kong's exports. Compared with last year, the first 10 months of this year have seen slower export growth across these six sectors, government data shows.

Electronics export growth eased from 18 per cent to 12 per cent, while jewellery fell from 23 per cent to 14 per cent. Growth in clothing exports declined from 8 per cent to 3 per cent and toys, which fell by 3 per cent last year, dropped by 8 per cent.