The Hong Kong Trade Development Council (HKTDC) has released its 1Q26 Export Confidence Index, revealing a more cautious sentiment among Hong Kong exporters despite recent strong export performance. The Current Performance Index stood at 46.5 while the Expectation Index registered 46.9, both showing moderate declines as exporters navigate an uncertain external environment. According to the HKTDC Export Confidence Index 1Q26 report, trade value expectations remained relatively steady with the Trade Value Sub-Index Current reading at 50.9 and Expectation at 49.1, suggesting unit prices are expected to hold firm in coming months.
HKTDC Director of Research Bruce Pang noted that the outlook for many of Hong Kong's major markets has moderated, including the ASEAN bloc and the Chinese Mainland, largely due to ongoing geopolitical developments. "Hong Kong's trade prospects should stay positive, yet remain cautious, pending the further easing of global geopolitical conflicts," Pang stated. The research indicates that while fundamental demand for electronics and other consumer sectors remains resilient in the longer term, current conditions warrant careful navigation.
Sector performance revealed significant divergence, with jewellery and clothing sectors outperforming the overall index. The jewellery sector's Current reading climbed to 57.1, representing a 5.9 point increase, while its Expectation reading rose to 56.0. The clothing sector showed even more substantial improvement, with its Current Index rising to 52.1 and its Expectation Index increasing by 9.2 points to 53.4. In contrast, electronics exporters experienced weakened sentiment with a Current reading of 44.9 and Expectation reading of 45.6, signaling disruptions over the Chinese New Year period.
Cost pressures showed signs of stabilization, with the Cost Sub-Index improving significantly despite remaining in negative territory. The Current reading rose 15.2 points to 38.1 while the Expectation reading increased by 8.5 points to 41.3, indicating potential sustained relief from cost pressures. The research noted that recent surges in oil and energy prices triggered by developments in the Middle East were not factored into the survey as fieldwork was conducted in January and February.
A significant finding from the survey highlights the growing importance of cross-border e-commerce as a strategic sales channel. The thematic assessment revealed that 46% of respondents were already engaged in cross-border e-commerce, with an additional 20% planning to enter the sector within the coming year. Among companies already utilizing e-commerce channels, the Chinese Mainland ranked as the leading destination at 24%, followed by the EU27 & UK at 17%, Canada & the US at 15%, and the ASEAN bloc at 14%. Kenneth Lee, HKTDC Section Head of Special Project & Business Advisory, emphasized that "market diversification remains a key strategy for Hong Kong traders to mitigate risks" while more companies leverage e-commerce to boost sales and enhance business sustainability.
The research findings suggest that while Hong Kong exporters face headwinds from global uncertainties, strategic adaptation through sector focus and digital transformation may provide pathways to resilience. The growing adoption of e-commerce channels represents a structural shift in how Hong Kong businesses approach international trade, potentially reshaping export strategies in an increasingly digital global economy. For business leaders monitoring Asian trade dynamics, these developments highlight both the challenges of geopolitical uncertainty and the opportunities presented by digital commerce platforms and market diversification strategies.
