Standard Chartered GBA Business Confidence survey shows steady economic progress

26 January 2024, Hong Kong – Standard Chartered and the Hong Kong Trade Development Council (HKTDC) today released the Standard Chartered GBA Business Confidence Index (GBAI) for the fourth quarter of last year. It shows that the “current performance index” for business activity eased to 51.4 in Q4 from 52.9 in Q3, while the GBAI “expectations index” slipped to 54.1 from 56.3 in Q3 – reflecting a more cautious business sentiment in the region compared to Q3, but is still consistent with a modest recovery story as we enter 2024.

Regarding cities’ performance, Hong Kong rose to 50 from 49 for its “current performance sub-index”, but its “expectation sub-index” fell to 49 from 52.6. The main drags were Manufacturing and Trading and Professional Services, while other industry components including Retail and Wholesale stayed largely steady. Shenzhen experienced the most decline among all cities in the GBA in terms of the “current performance sub-index”, falling to 49.5 from 54.8 – it was also the only city that fell below 50.

In terms of industry, the “current performance indices” for business activity for Retail and Wholesale (down 4.6 points) and Innovation and Technology (down 4.2 points) saw the biggest quarter-to-quarter drops in Q4 among the five industry categories. Their scores could merely be normalising from a high base, as they were strong outperformers in Q3. However, in terms of ranking, Innovation and Technology (54.6) managed to cling on to the top spot despite this steep quarter-to-quarter drop, while Retail and Wholesale (50.5) fell to the last place from its previous second-place position in Q3.  

Kelvin Lau, Senior Economist, Greater China, Standard Chartered, said: “With both the current performance and expectations sub-indices of GBAI still staying above 50, we remain confident that the region is entering 2024 with modest recovery momentum. We are particularly encouraged by the strong ‘production/sales’ and ‘profits’ performance, and a rebounding tech industry. To avoid lingering cautiousness becoming entrenched, we believe more policy easing is likely in the coming quarters and see room for credit and labour market conditions to improve.”

In addition, the survey also captured the labour-market conditions in the GBA and companies’ hiring plan for 2024. A collective 53.2% of the respondents described the current labour supply conditions for their industry as “somewhat loose” and “very loose”, which is significantly higher than those who reported “somewhat/very tight” (11.4%) conditions. Furthermore, 14.1% of the respondents said they would increase hiring in Q1 of 2024, while the number rises to 15.8% for the entire year of 2024. 71.2% of the respondents expressed their willingness to hire more youngsters or fresh graduates in 2024 to support youth employment.

Irina Fan, Director of Research, HKTDC, said many businesses in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) were looking to both boost staff retention levels and increase automation in order to ensure recovery momentum was maintained in the face of long-term labour market challenges. Outlining the strategies being adopted, she said: “Cross-border recruitment is also very much on the agenda, along with the appointment of recent graduates and other younger staff members. All of this is essential given that the outlook for 2024 is increasingly positive.”

The GBAI is the first forward-looking quarterly survey in the market that looks at the business sentiment and synergistic effects in cities and industries across the GBA. It is 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. The index enables investors and businesses to better understand the current business climate, gauge future performance prospects and formulate their market strategies for the GBA.

Related materials

•  Standard Chartered GBA Business Confidence Index Report: https://www.sc.com/hk/gba/gba-index-report/
•  HKTDC Research: https://research.hktdc.com/en/article/MTU5ODQ0NjExOA

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About HKTDC 
The Hong Kong Trade Development Council (HKTDC) is a statutory body established in 1966 to promote, assist and develop Hong Kong's trade. With 50 offices globally, including 13 in Mainland China, the HKTDC promotes Hong Kong as a two-way global investment and business hub. The HKTDC organises international exhibitions, conferences and business missions to create business opportunities for companies, particularly small and medium-sized enterprises (SMEs), in the mainland and international markets. The HKTDC also provides up-to-date market insights and product information via research reports and digital news channels. For more information, please visit: www.hktdc.com/aboutus.