Press

For Immediate Release

Businesses in Hong Kong remain cautiously optimistic about their prospects for the coming year, according to the findings of the Hong Kong General Chamber of Commerce’s (HKGCC) latest Business Prospects Survey, conducted between 12-26 November, with respondents citing the slowing global economy, high costs and geopolitical headwinds as their key challenges.

In the first 10 months of 2024, over 60% said their business turnover had increased (29.2%) or remained more or less the same (31%) compared to the same period last year. For the coming year, 31.1% predicted an increase in business, and 45.2% not expecting any change. For Hong Kong’s economic outlook in the next 12 months, 18.3% said they were positive, 25.1% anticipating no change, and 44.3% being negative.

“Our members indicated they remained positive about the growth of their business and investment in the Mainland, ASEAN, and the Middle East,” said HKGCC Chairman Agnes Chan. “Due to the general economic malaise around the world, strong growth in these regions can also help Hong Kong companies offset economic and geopolitical headwinds.”

On hiring intentions, 26% of respondents said they plan to hire more staff, 49.8% will maintain their current headcount, and 17.4% plan to cut staff. Moreover, 39.7% said they would increase base pay, and just 1.8% of respondents said they plan to cut pay. The findings also reflect that recruitment difficulties have eased, with just 10% saying they still faced significant challenges in hiring people.

Regarding investment sentiment, companies plan to tighten their belts, with 61.2% of respondents expecting no change in their capital investment levels over the next year, up slightly from 57.5% in the previous year. Some 14.2% of those polled planned to put up additional capital, while just 11.4% plan to reduce capital investment.

However, for investments in the Greater Bay Area (GBA) (excluding Hong Kong), sentiment was far more positive. For respondents who were already operating in the region, 34% said they would increase investment over the next 12 months, compared to just 5.4% who said they would reduce their investment level in the GBA. Their investment intentions for the rest of the Mainland were similarly optimistic, with 27.5% planning to increase investment while 48.9% will maintain their capital investment level in 2025.

Regionally, businesses were also bullish, with 38.6% planning to invest more in ASEAN markets and 25.9% in the Middle East. The results align with over half (53.9%) of respondents’ strategies to diversify their business, mainly expanding into new markets (63.6%) and expanding product or service offerings (61%). Limited resources and high costs, 53.9% and 51.1%, respectively, were cited as the major obstacles in diversifying their business, followed by employees’ skills gaps.

A new question in this year’s survey was how enterprises use AI to help their operations. Almost half (49.3%) said they were using it on a limited basis, and 7.8% used it extensively. However, 25.6% said they plan to use AI eventually, and 17.4% said they had no plans to use it at all.

“The respondents ranked a lack of skills among staff and the lack of technical talent as the main obstacles to using AI, so this is something that needs to be tackled to help companies, or they risk being left behind their competitors,” said Chan.

HKGCC also unveiled its 2025 economic forecast, which predicts real GDP growth of 2.3% with headline inflation of 2.0%.

Hong Kong is on the road to post-pandemic recovery, but the economy continues to grapple with significant challenges internally and externally. However, the launch of new mega infrastructure projects, such as the three-runway system and the Kai Tak Sports Park, are poised to raise long-term growth and enhance our competitiveness.

About the survey
The annual Business Prospects Survey was conducted from 12-26 November 2024, and received a total of 219 valid responses. Professional and business services accounted for the most respondents (28.8%), followed by trading companies (19.2%) and financial services (10%).

Slides for the survey can be downloaded here.

 

Media inquiries: Please contact Mr Jonathan Man at 2823-1229 / jonathan@chamber.org.hk