The Hong Kong Trade Development Council (HKTDC) has raised its 2026 export forecast to year-on-year growth of above 20%, citing stronger-than-expected performance in the first five months and sustained momentum in global demand for technology products. The HKTDC Export Confidence Index for the second quarter of 2026, also released today, showed improvement in both key indicators: the Current Performance Index rose to 51.0 and the Expectation Index reached 52.4, both rebounding above the 50 threshold. This reflects improved exporter sentiment amid evolving US trade policies and ongoing geopolitical developments.
Bruce Pang, HKTDC Director of Research, said: “The recent upturn has been supported by resilient regional trade amid the AI-driven technology cycle, which has been maintained despite lingering uncertainties in the Middle East. Overall, the outlook for many of Hong Kong’s major markets has improved, with the Chinese Mainland and ASEAN remaining the most promising.” He added that sentiment towards the US market has strengthened following the Xi-Trump meeting in mid-May and recent trade policy developments.
In the first five months of 2026, Hong Kong’s exports recorded a robust 36.2% year-on-year increase, underpinned by strong demand for electronics amid an accelerating global AI cycle. Electronics accounted for more than 70% of Hong Kong’s total exports, with semiconductors and intermediate items performing particularly strongly. The proliferation of AI applications, including generative AI and enterprise digitalisation, has triggered a new wave of demand for high-performance chips, ICT equipment, and related components, significantly boosting Hong Kong’s re-export trade to the Chinese Mainland, ASEAN production bases, and major developed markets.
However, a notable portion of recent growth has been price-driven due to tight supply conditions in the semiconductor sector, leading to significant increases in component prices, especially for memory chips and advanced processors. Wing Chu, HKTDC Deputy Director of Research, said: “The export value of key electronic components has risen faster than order volumes, with price increases amplifying overall growth. However, as production capacity expands and supply constraints gradually ease, semiconductor prices are expected to moderate. This may lead to some softening in export value growth over the longer term, even as underlying demand for AI-enabled devices and infrastructure remains resilient.”
Hong Kong continues to play a critical role as a regional trading hub, facilitating the flow of electronic parts and semi-manufactured goods across Asian supply chains and into global markets. This intermediary role has been a key factor in the city’s strong export performance and is expected to remain a source of resilience even as component prices normalise over the medium term. Kenneth Lee, HKTDC Section Head of Special Projects & Business Advisory, noted that steady overseas demand for consumer products has provided further support, reflecting the resilience of global consumption in recent months.
Looking ahead, several uncertainties could weigh on trade performance, including geopolitical tensions, particularly developments in the Middle East; volatility in global energy prices; policy uncertainties and rising protectionism, including evolving US trade measures and shifts among major trading partners. For more details, refer to the 2026 Mid-Year Export Review and Outlook and the HKTDC Export Confidence Index 2Q26 on the HKTDC Research website.
