The outlook for exports and imports by air continues to be clouded by the ongoing US-China tensions, but sentiment has recovered to pre-coronavirus pandemic levels, according to a quarterly survey of Hong Kong businesses by logistics company DHL Express Hong Kong.

The company’s Air Trade index, which measures Hong Kong-based companies’ outlook on exports and imports by air, touched 31.2 in the fourth quarter of this year, its highest level since the third quarter of 2019. A reading below 50, however, represents a negative outlook.

The survey’s findings come at a tough time for the city – its economy has been battered by the coronavirus pandemic, and anti-government protests before that. Its gross domestic product is expected to shrink by 6 to 8 per cent this year, marking its first back-to-back annual contractions since record-keeping began in 1961. Unemployment too has risen, surging to about a 16-year high of 6.4 per cent for the three months through September, according to government data released on Tuesday.

Companies in the city were, however, “cautiously optimistic” about the year-end festive season, according to a report on the survey commissioned by DHL and compiled by the Hong Kong Productivity Council. The companies have been able to turn to e-commerce to maintain their business operations, a move that has gradually improved their income from exports and imports by air, Edmond Lai, the council’s chief digital officer, said in the report.

“It is anticipated that the festive season in the fourth quarter may drive growth in import and export trade, so that the overall index can return to pre-epidemic levels,” he said. “However, the US-China trade frictions are still one of the factors that affect the industry’s sentiment. Also, the epidemic is accelerating changes in global trade and consumption patterns, with local enterprises tackling these challenges with digital transformation,” Lai added.

More than 600 Hong Kong-based companies with exports and imports by air were surveyed for the report. Around 59 per cent of the Hong Kong companies surveyed expected a negative impact on their exports and imports in the fourth quarter of this year as the US-China trade tensions continue to intensify.

Meanwhile, 55 per cent of the companies surveyed said they had recorded a loss in the third quarter, and of these 65 per cent said the deficit had widened compared with the second quarter.