Negative export growth this year

Hong Kong stands to see no growth in its total exports for this year as businessmen remain pessimistic about the economy.

The Hong Kong Trade Development Council cut its growth forecast for the city's exports this year to negative 1% from positive 1% as exporters' confidence fell to the lowest level since the second quarter of 2009.

Data from Hong Kong's Census and Statistics Department for the first seven months of the year show that the total value of merchandise exports dropped by 0.3% over the same period in 2011. HKTDC expects the city's exports this year to be negative 1%, suggesting that Hong Kong's exports from August to December are expected to be even worse.

The HKTDC Export Index for the third quarter of this year plunged to 35.3 from 47.2 in the second quarter due to the demoralizing effects of weaker demand from buyers, an unfavorable exchange rate and stiffer competition.

The index, which is based on quarterly surveys of around 500 Hong Kong exporters, monitors exporter performance and gauges their near-term prospects. A reading below 50 indicates a pessimistic sentiment during the quarter and signals a short-term contraction in Hong Kong's exports while a reading above 50 indicates an expected increase in exports.

All six major industries' indices exhibited a weaker sentiment for exports, including the electronics index that dropped by more than 10 points to 36.1 for the third quarter. Electronics' demand slowdown is expected to have a major impact on Hong Kong's exports due to its multiple effects on intra-regional trade.

The jewelry index recorded the highest reading of 41, but the score has also dropped 6 points from the previous quarter. The Machinery index had the lowest reading of 29.6, signaling the weakest confidence of all sectors.