Growth in the value of Hong Kong's exports may slow to one per cent next year, according to the Trade Development Council which says confidence levels of traders have slumped.
Even exporters to the mainland, the world's second-largest economy, appear downbeat about the new year outlook amid rising global economic uncertainties.
Local exporters from all sectors - including those selling luxury goods such as watches and jewellery - are not optimistic about their business prospects.
The TDC confidence index, which is based on the views of 500 local exporters, fell to a two-year low of 40.6. Any figure below 50 indicates a negative outlook.
Exporters to the US and Europe were the gloomiest, followed by traders to Japan. Exporters to the mainland saw their confidence level drop to 49.5, while traders of jewellery and timepieces recorded a reading of 40.2 and 42.8 respectively.
TDC chief economist Edward Leung said some exporters had overreacted to the spate of recent bad news about the euro-zone crisis.
'Watches and jewellery will continue to lead sales growth next year in the mainland,' he said. 'As for local exports to the mainland, many of them were semi-finished products for re-export to the US and Europe, which means a drop in demand in the Western countries could have an impact on Hong Kong exports to China.'