Businesses across the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) experienced a slight weakening in activity in the third quarter of 2024, though continue to be optimistic about prospects, according to a survey of 1,000 businesses conducted by Standard Chartered and the Hong Kong Trade Development Council (HKTDC).
The survey’s “current performance” index for business activity fell to 50.6 in the third quarter from 54.1 in the previous quarter, indicating a weakening of economic momentum.
In contrast, the “expectations” index rose for a second straight quarter to 55.2 in the third quarter from 54.8 in the previous quarter, reflecting improved sentiment among firms.
In terms of cities surveyed, Hong Kong posted the highest “expectations” index, rising to 58.8 in the third quarter from 49.7 in the second quarter, the steepest rise among the 11 GBA cities, while “current performance” slightly increased 0.2 points to 47.3.
Despite the upbeat outlook, 60% of respondents saw external and internal risks posing a substantial risk to their overall business in the next 12 months.
Businesses cited higher global inflation and interest rates, slowdown of growth in China, and trade tariffs and sanctions against China-origin products as the top three concerns.
In terms of trade barriers, 47.2% of respondents said they were negatively impacted by tariffs versus 44.2% by sanctions and 34.6% by non-tariff barriers.
In the face of potential trade disputes, businesses are preparing a mix of strategies. Of the 37% survey respondents involved in external trade and anticipating a change to their external trade in the next few months, 88% said they would front-load their second-half export orders, while 81% said they would front-load their imports to minimise the potential impacts to their businesses.
The Standard Chartered GBA Business Confidence Index is a forward-looking quarterly survey gauging business sentiment across cities and industries in the GBA.
1,000 companies in the GBA region are surveyed on their overall operations, business environment and expansion plans. Industries surveyed include manufacturing & trading, retail & wholesale, financial services, professional services and innovation & technology.
