Hong Kong traders see Biden bounce for airfreight

Hong Kong traders are optimistic about the airfreight outlook, following the inauguration of Joe Biden as the US president, which might ease tensions between China and the US.

That is the headline result of the latest DHL Hong Kong Air Trade Leading Index (DTI), a quarterly survey of more than 600 Hong Kong companies commissioned by DHL Express Hong Kong and compiled by the Hong Kong Productivity Council (HKPC).

Overall air trade saw a slight increase from the previous quarter. Both air imports and air (re-) exports also saw improvements this quarter, with increases both observed in the Americas and Asia Pacific regions.

With the Covid-19 pandemic still affecting many parts of the world, 41% of air traders indicated that they have maintained a balance, 12% reported a positive profit while 47% recorded a loss in the previous quarter.

In addition, air traders resorted to cost-cutting, capital injection and digitalization to cope with the pandemic in the past year. Two-thirds of them also believe that their business could benefit, should Hong Kong join the regional comprehensive economic partnership.

The electronic products and parts — as well as gifts, toys and houseware — index dropped after the festive season ended.

Indices for the apparel and clothing accessories and also for the watches, clocks and jewellery sector both saw improvements for two consecutive quarters, and were the only commodities recording notable growth in mainland China. The food and beverage index also inched up this quarter.

Market indices for the Americas, Asia Pacific and the rest of the world regions have increased in the first quarter of 2021, with the Americas being the best performing market recording a consistent upward trend. Only Europe has seen a decline, although there is a positive outlook in its shipment urgency.

Edmond Lai, chief digital officer of the (HKPC), said: “The Covid-19 pandemic continues to affect people’s life and economy globally. However, the rolling out of vaccines in regions and the relatively more optimistic view towards the China-US relations have made the market more positive on air trade outlook for the start of 2021, ensuring the overall index to go up continuously.

“As continuous digital transformation becomes a key point for doing business, enterprises should prepare themselves and be agile to tackle business challenges and capture new opportunities on any likely recoveries in the economy.

“HKPC strives to provide local industries with all-round support, including remote business operations, epidemic prevention and funding schemes, to grasp the nettle together and develop new directions using new technologies.”

Since the first reading in the second quarter of 2014, over 600 samples are randomly selected from over 10,000 entries every quarter to reveal the respondents’ expectation on air trade. The survey is conducted by telephone. Each sample has the same weighting in calculating the index, regardless of the size of the company.

An index value above 50 indicates an overall positive outlook while a reading below 50 represents an overall negative outlook for the surveyed quarter. The further the reading is from 50, the more positive or negative the outlook is.