Standard Chartered GBA Business Confidence Survey shows firms remain cautious amid Trump impact in Q4

15 January 2025, 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 2024. The business sentiment remained soft in the quarter with the “current performance” index staying largely unchanged at 50.7 versus 50.6 in Q3. The “expectations” index showed a drop to 52.9 from 55.2, reflecting early signs of concerns over Donald Trump’s re-election last November and weighed down the overall business outlook.

All city “expectations” sub-indices held up above neutral mark

Considering the Greater Bay Area (GBA) as an export-oriented city cluster and the rising concerns over US-China trade tensions under U.S. President Elect Donald Trump re-election, almost all city sub-indices posted a drop, contributing to the setback in the “expectations” index. “Macau and other cities” were the only sub-index that recorded a modest rebound in the period. However, all city sub-indices were above the 50 neutral mark.

Echoing the mixed signals from the macro data, the “current performance” sub-indices for industry categories showed divergence. For example, the “current performance” sub-index for manufacturing rebounded modestly to 50.1 from 49.5 in Q3, while “retail and wholesale” fell the most by 3.9 points to 51.9 over the same period.

In terms of business outlook, all five industry sub-indices for “expectations” fell in the quarter, most noticeably “innovation and technology” (-12.4 points to 57.3), followed by “professional services” and “retail and wholesale”, indicating a broader softening of GBA sentiment beyond the impact of U.S.’ trade tariffs on manufacturers.

Kelvin Lau, Senior Economist, Greater China, Standard Chartered, said: “The latest findings captured early market reaction to Trump’s re-election. However, the recent policy shift to a ‘modestly loose’ monetary stance, which was not captured in the quarter four findings, may potentially lift the next quarter’s GBAI survey results. Further stimulus may also prolong the policy tailwind in the coming quarters, providing the key to an eventual rebound in GBA business sentiment.”

China’s pro-growth policy pivot boosted business confidence

Against the external uncertainties, policy makers in China have adopted a pro-growth approach to support the local economy. 33% of respondents saw some degree of positive impact on a 12-month outlook.

Irina Fan, HKTDC Director of Research, said: “As the Chinese authorities have clearly shifted to a more pro-growth policy approach, among the positive respondents, 62 percent and 47 percent said they would either significantly or marginally upgrade their sales and investment plans, respectively, in 2025, especially those in the ‘innovation and technology’, ‘retail and wholesale’ and the ‘financial services’ sectors were most positive with 70 percent to 80 percent of the respondents indicated they would increase sales or investment in 2025.“

When asked which policy measures would positively impact their business, most respondents (almost 49%) wanted “more corporate tax concessions and subsidies”, followed by “more initiatives to support SMEs financing” (40%), and “new measures on strengthening international trade activities” (33%). Meanwhile, domestically oriented industries like “retail and wholesale” and “financial services” saw more votes going to “additional stimulus to boost domestic consumption” compared with the broader survey population (32%).

About the GBAI

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/MTg5OTE2MTA3NA

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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 over 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.