The Chamber’s annual Business Prospects Survey provides a useful snapshot of the mood of Hong Kong’s business community and, unsurprisingly, sentiment this year is gloomy. The Covid-19 pandemic has been a cruel blow to businesses already hit by 2019’s social unrest and lingering U.S.-China trade tensions.
The most worrying finding from our survey was that one in five respondents said their turnover had plunged by at least half in the first 10 months of 2020. Overall, more than 60% of the survey respondents said their business turnover had declined compared to the same period in 2019, rising to 66% for SMEs. The memory of this shock still lingers on, and around 40% of respondents believed that business prospects trends would remain negative in 2021. These figures clearly show the huge impact that the pandemic has had.
The vaccines currently in development mean that we can be hopeful that the pandemic will recede this year. But the vaccination process will not happen overnight, and continued uncertainty is affecting businesses’ ability to plan ahead. Many report that they will be treading water in 2021, with no plans to increase capital investment or headcount.
If there is one silver lining with the pandemic, it is that it has nudged many companies to embrace the huge array of technologies available. Our survey reveals that 58% of businesses plan to make a significant investment in digitalization, and over half (55%) said they would allow employees to work remotely, at least some of the time.
We know that Hong Kong has been slightly behind the times in terms of technology adoption, but the digital genie is out of the bottle now, and businesses that are not up to date with their online capabilities risk being left behind.
Another positive point in our survey is the Greater Bay Area (GBA). Companies are more bullish on investment in this region than in the rest of the Mainland, with 50% saying they would increase capital investment in the GBA. This shows that the GBA has become a key investment destination for Hong Kong companies as new policies improve connectivity across the region. We look forward to more measures being rolled out in the near future.
You can read more about the survey results on page 18. I’d like to thank all of you who have responded, as this will help us better reflect your thoughts to policymakers.
The past year has been unprecedented. I sincerely hope – as I wish all of our members a Happy New Year – that 2021 will bring much more joy and prosperity to all our lives and businesses.