Don't be too optimistic on Hong Kong's export growth, warns analyst

It slipped 2.8% in October.

According to DBS, export growth went under water in October (-2.8% YoY) after shooting up to 15.2% in September from 0.6% in August. Clearly, there is as yet no trend improvement in exports.

Here's more from DBS:

Meanwhile, import growth tumbled to 3.3% from 14.9% in September, hammering down the monthly trade deficit to HK$ 42.7bn versus HK$ 45.2bn in September.

Over January to October, exports and imports grew only 1.0% and 2.6% respectively, enlarging the trade deficit year-to-date (HK$385.5 bn) by 15.7% from the same period a year ago. This explains why net exports have been a drag on GDP growth so far this year.

Geographically, only exports to China eked out positive growth (1.1%). Exports to the US dipped back in the red (-2.4%) after surging 9.0% in September. Exports to Japan dropped 9.4%, significantly down from the 16.6% rise in September.

The only major country exhibiting something closer to a trend is Germany, with export declines progressively narrowing in the last three months (Oct: -7.7%).

Despite recent improvement in China’s economic data, Hong Kong’s export outlook remains fundamentally gloomy as major Western export markets continue to weaken. It is too early to be optimistic about the external trade outlook.