For Immediate Release
Businesses are predicting a bleak outlook for the coming 12 months as damage inflicted by months of protests and the Sino-U.S. trade war will continue to take their toll on companies in 2020, according to the results of the Hong Kong General Chamber of Commerce’s (HKGCC) annual Business Prospects Survey.
For the first 10 months of 2019, almost half (49%) of respondents said that their business turnover had fallen compared to the same period last year. Some 32% said there had been no change, while 13% said they had seen an increase in turnover (Figure 1).
The protests and trade war were the two biggest factors affecting respondents’ businesses, followed by China’s slowing economy. A total of 67% of respondents said that the protests in the city were either a very important (40%) or important (27%) factor impacting their business, compared to 61% for the trade war (Figure 2).
“Businesses have been battered by internal and external turmoil, which is also impacting employees,” said HKGCC Chairman Aron Harilela. “Restoring normality and healing divisions are critical for the city’s recovery process. The results of the district elections demonstrate that people want a dialogue to work out solutions for Hong Kong’s current challenges, and we hope this process will begin as soon as possible.”
When asked what measures could help their business, “63% of respondents said that healing divisions in society and restoring law and order were the most important measures, compared to 19% for tax and fees concessions, and just 4% for increasing the SME Guarantee Fund,” he added.
When asked how their business had been affected since the start of the protests in June until October 2019, a total of 84% of respondents said their business had been affected (29% significantly, 30% moderately, 25% slightly affected). Only 13% said they had not been affected (Figure 3).
For the coming 12 months, 37% of respondents said they expect their business turnover to continue to fall, while 34% predicted business would be flat. Only 13% expected to see in increase in turnover (Figure 4).
Against this background, just over half (54%) of respondents planned to maintain capital investment levels in Hong Kong (Figure 5) and only 5% planned to increase investment.
Consequently, only 11% were planning to hire more staff, and 28% of businesses said they planned to increase staff pay in 2020.
“Our survey was conducted in early November, which does not take into account the intensified disruption and violence in mid-November, so businesses are most likely suffering even more than the results of our survey show,” said HKGCC CEO Shirley Yuen.
“It is also important to note that about half of the respondents were SMEs, who have limited reserves to carry them through these very challenging times. Restoring order and normality, not concessions, are the key to their survival, because at the end of the day businesses will not be able to recover, nor investors return, unless things get back to normal,” she added.
About the survey
The Hong Kong General Chamber of Commerce’s Business Prospects Survey was conducted from 4-8 November 2019. A total of 416 responses were received from member companies, 46% of whom were SMEs.
Charts for the survey can be downloaded here.
Media inquiries: Please contact Ms Kari Yu at 2823-1266 / firstname.lastname@example.org