Businesses in GBA (the Guangdong-Hong Kong-Macao Greater Bay Area) regain confidence as normal travel between Hong Kong and China has fully resumed, said the Hong Kong Trade Development Council (HKTDC) recently.
According to the GBA Business Confidence Index (GBAI) for the first quarter of 2023, released together by Standard Chartered and the HKTDC), the current performance for “business confidence” jumped 11.8 points to 51.3, which was also the first above-50 print since the fourth quarter of 2021.
The GBAI was compiled based on a survey of more than 1,000 companies in the GBA covering the manufacturing and trading, retail and wholesale, financial services, professional services and innovation and technology sectors, HKTDC noted.
The expectations index leapt to 61.5, the 16.4 points jump was the biggest on record since GABI was launched in the second quarter of 2020, HKTDC added
Sub-indices surge across board
Both the current performance and expectations sub-indices for business activity of all industries rose.
Financial Services (59.8) and Innovation and Technology (54.3) topped current performance index; while Professional Services (65.2, up 19.1 points), Manufacturing and Trading (61.3, up 17 points) and Financial Services (67.4, up 16.9 points) showed the strongest improvements in expectations index.
Dongguan, Guangzhou and Shenzhen lead bulls
The current performance and expectations sub-indices rebounded for business activity in all GBA cities; Foshan (55.1), Dongguan (53.5) and Hong Kong (51.6) performed better for the time being, while the strongest growth in expectation index was registered in Dongguan (69.6, up 32.5 points), Guangzhou (67.7, up 24.6 points) and Shenzhen (60.8, up 13.7 points).
Back to normal by 2024
Close to two-thirds (65%) of the interviewees said relaxation of mainland pandemic measures would positively impact their business for the rest of this year.
More than half (53%) of the respondents said they had raised the business targets since the resumption of normal travel earlier this year.
About 60% of them expected business – in terms of workforce, capacity utilisation, orders and sales – back to or exceeding the pre-COVID level in the fourth quarter.
Improved consumption in China is expected but businesses in GBA remain concerned about rising raw-material costs, geopolitical tensions and intensifying competition within the industry, HKTDC observed.
Firms in GBA hope expanding domestic demand, new GBA-specific policies, more attractions for foreign investments and more supports to the private sector will further improve the business operating environment, HKTDC added.