· DHL launches first-of-its-kind air trade indicator for local enterprises and SMEs
· Air trade outlook shrinks for two consecutive quarters due to fragile demand from Europe and dwindling trade of high value commodities
· Traders anticipate pre-Christmas orders as a positive lever for growth in traditional winter quarter peak
HONG KONG, Nov. 12, 2014 /PRNewswire/ — The key finding of the DHL Hong Kong Air Trade Leading Index ("DTI") showed that air trade outlook had shrunk for two consecutive quarters due to weak demand from Europe and declining trade of high value commodities. The overall drop revealed by the index is indicative of cautiousness among air traders about the outlook of the global economy.
The first indicator of its kind in Hong Kong, commissioned by DHL Express Hong Kong and compiled by the Hong Kong Productivity Council ("HKPC"), has just been released for the third time, to share insights about Q4. The index aims to provide a forward looking perspective on overall air export and import trade volumes by analyzing key attributes of business demand including Sales Volume, Product Variety and Shipment Urgency, as well those of regional market segments, measured by air shipment volume by various trade lanes. Sentiment regarding the five key types of air-freight commodities was also examined.
In Q4, DTI, representing the overall Air Trade Volume Index, posted at 51.6, 0.7 points lower than Q3, and down for two consecutive quarters moving towards the neutral line of 50. The Export Index fell by 1.2 points to 49.5, indicative of a slightly negative sentiment, attributable to declining sales orders and fragile demand especially from Europe, Emerging Markets and dwindling high value commodities trade. The Import Index, however, showed a slight improvement shifting to 55.0 from 54.5 in the previous quarter, driven by modest demand for Food and Beverage.
Among the key attributes for air-freighted shipments, Product Variety had the highest reading at 58 points, followed by Sales Volume (55 points) and Shipment Urgency (52 points), all down against Q3 figures and consistent with the market trend since the launch of DTI, though still positive. Air traders were generally positive about pre-Christmas orders boosting product variety.
Business sentiment declined unevenly across trading markets albeit all still scoring above 50 points and so remaining positive. An uncertain outlook for Europe and Emerging Economies has dampened exporters’ confidence to trade with these markets. On the other hand, importers indicated that local demand for Asia imports remains robust.
In terms of Air-Freighted Commodities, traders were confident of growth in Food and Beverage sales with import from the European market climbing three quarters in a row, and also the outlook for Electronics and related parts. However, weak demand was anticipated for Apparel and Clothing products (50 points) and luxury goods such as Watches, Clocks and Jewellery (47 points), and especially Gifts/Toys and Houseware imports which fell more than 10 points from 59 in Q3 to 47, attributable to cooling retail sales.
Ken Lee, Executive Vice President Commercial, Asia Pacific and Managing Director, Hong Kong and Macau, DHL Express, said, "We thank HKPC, a major advocate of business excellence in Hong Kong, for helping to compile the DTI, which provides a valuable reference for local businesses, especially SMEs that did not previously have access to such informative data to help them assess the outlook of their markets and devise business strategies and tactics accordingly."
Kim Chan, General Manager (Enterprise Innovation) of HKPC, said, "We are pleased to collaborate with DHL to launch this Index to assist SMEs, in particular those which are in the trading sector, with their business planning and to identify new opportunities. As a key support organization for Hong Kong industry, HKPC is committed to using its wealth of multi-disciplinary professional expertise to help local enterprises create values and scale new heights with flexibility and continuous innovations."
The quarterly DLI, compiled based on a survey of 600 Hong Kong companies focusing on in- or out-bound air trading, was launched this year starting with the second quarter, with 50 points as neutral and the further away the reading is from 50, the more positive or negative is the measurement. Its aim is to analyze the relationship between air trade and the Hong Kong economy, thus providing market intelligence to local enterprises enabling them to arrive at an informed view of their markets.
The DHL Hong Kong Air Trade Leading Index report is available at u.hkpc.org/dti_eng.
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