DHL Hong Kong Air Trade Leading Index (DTI)

DHL Hong Kong Air Trade Leading Index ("DTI") is a quarterly survey implemented by the Hong Kong Productivity Council ("HKPC"), and commissioned by DHL Express (Hong Kong) Limited ("DHL").

DTI is the first-of-its-kind in Hong Kong, offering publicly available market intelligence for local enterprises, especially SMEs which typically have limited resources or access to information, enabling all to take reference from a comprehensive business review of the sector in which they operate.

The Overall Index represents the air trade market outlook for the surveying quarter, in respect of import and (re-)export. The research also studies the underlying trends in business attributes, markets and air-freighted commodities, thus assisting local enterprises in arriving at a primed view of the business outlook of their markets.

DTI - Second Quarter of 2022

Release Date: 21 Apr, 2022

REPORT SUMMARY

Affected by the latest wave of COVID-19 pandemic in Hong Kong, the overall trade index continued to drop. Most local air traders reflected that the road freight disruptions between Mainland China and Hong Kong have adversely affected their business while only one-tenth would opt to suspend new orders under high logistics costs.

• The overall air trade index witnessed a steep drop to 35.8 points with sharp declines in both exports and imports indices, showing a more conservative market outlook. The resurgence of the pandemic in Hong Kong, along with the rise in fuel prices and geopolitical tensions in Europe, posed challenges on business environment in general this quarter. Declines were noted across all key indicators of the Air Trade Index in Q2 2022.
• Sales Volume index dropped to 35 points, likely due to the slowdown of market activities. Shipment Urgency and Product Variety indices also dropped to 40 and 43 points respectively, presumably due to transport disruptions and softened product demand.
• After a gradual improvement in profitability over the past two years, the profitability level retreated to Q4 2020 level, with around half reporting loss in Q1 2022, 42% reporting balance and only 9% reporting gain.
• More than half of the local air traders reported delays in shipment and lower shipment volume amid disrupted manufacturing arising from the omicron outbreak. 42% of local air traders expressed that the lower-than-expected overseas consumption intention had an adverse impact on their business this quarter.
• The further-tightened air capacity in Hong Kong led to challenges to the air trade environment, according to 48% of local air traders. With the gap between air and sea freight costs became narrowed, one-third of respondents used more air freight in the first quarter of 2022.

Mr Edmond Lai, Chief Digital Officer of HKPC, shared, “With the local anti-pandemic measures being further tightened as a result of a new round of COVID-19 outbreak in Hong Kong since the beginning of the year, coupled with rising international oil prices and geopolitical tension in Europe, the impact on production processes and transportation networks has intensified, especially on product delivery and frontline operation. All indices fell sharply this quarter, and the profitability fell back to the pre-2021 level, reflecting that local air operators are not optimistic about the short-term business environment. However, since the emergence of COVID-19 globally in early 2020, companies have become better prepared to deal with different situations. These include building a firm foundation in e-commerce and business digitalisation. As the epidemic slows down, normal operation of the supply chain will gradually resume, and product demand will rebound, allowing local air cargo activity to pick up again. Therefore, in addition to making good use of existing support to overcome current challenges, Hong Kong enterprises should regularly review their workflow and formulate long-term strategies to further utilise new technologies, such as artificial intelligence, blockchain, cloud technology, and big data analytics, robotics, etc., to enhance competitiveness and prepare for the recovery of the global economy after the pandemic.”

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Methodology

Index Calculation: Index = [100 x (Percentage of samples responding "Positive") ] + [50 x (Percentage of samples responding "Neutral") ] + [0 x (Percentage of samples responding "Negative") ]

Readings

• Ratios of collected responses are used to form the indices.
• 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.

Demographics

• Respondents are Hong Kong-based companies associated with either inbound or outbound air trade. It includes Watches, Clocks & Jewellery, Apparel & Clothing Accessories, Electronic Products & parts, Gifts, Toys & Houseware, Food & Beverage and Others (including courier service and other items which do not belong to the categories listed above).
• Over 600 samples are collected in each quarter.
• Sample companies are randomly selected from publicly available directories.

Disclaimer

This report contains survey result based on research findings.  HKPC will not be liable for any loss, mistake, delay, action or non-action by viewers of this report.

Enquiry

For more details about the Index, please contact HKPC at tel. (852) 2788 5306.