Hong Kong’s overall near-term business outlook among large enterprises for the third quarter improved slightly as the appetite for hiring in many sectors improved.
According to the Quarterly Business Tendency Survey for the third quarter, released by the Census and Statistics Department (C&SD) on Friday, 10 percent of respondents expect a better business situation in the third quarter. The figure is slightly less than the corresponding 11 percent in the second quarter. The number of respondents expecting a worse business situation decreased from 16 percent in the second quarter to 14 percent in the third quarter.
Respondents expect the employment and selling prices/service charges level to remain broadly unchanged in the third quarter compared with the previous quarter.
More respondents in the transportation, storage and courier services, and in the real estate and the professional and business-services sectors expect their business situation to be worse in the third quarter compared to the preceding quarter. In the financing and insurance sector, however, more respondents expect their business situation to be better.
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“Sustained economic expansion in Hong Kong should continue to support local business sentiment. As the external environment remains fluid with renewed escalation in the Middle East tensions, the government will continue to closely monitor the situation for any implications on business sentiment,” a government spokesman said in a statement on Friday.
A survey by Dah Sing Bank, which interviewed 340 Hong Kong small and medium-sized enterprises, said that the city’s SMEs are facing a triple squeeze of rising costs, weakening demand, and interest rate fluctuations, with outbound consumption on the Chinese mainland continues to affect business revenues.
“It is encouraging to see businesses actively adopting measures such as optimizing cost structures and enhancing customer experience. In an environment of heightened uncertainty, stable cash flow and operational agility has become even more important,” said Phoebe Wong, deputy chief executive, senior executive officer, and head of Group Personal Banking at Dah Sing Bank.
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China CITIC Bank International Chief Economist Allen Ding warned: “The situation in the Middle East is still a market focus. As US Federal Reserve Chairman Kevin Warsh’s monetary stance is more hawkish than expected, the increased likelihood of a rate hike next year will have an impact on capital costs and risk appetites on a global scale.”
The C&SD also released the latest unemployment figure on Friday. The seasonally adjusted unemployment rate stood at 3.7 percent in the April-through-June period, the same as that in the March-through-May period. The underemployment rate rose slightly to 1.6 percent in the April-through-June period.
“The ongoing economic expansion should continue to support the overall labor market, though the entry of fresh graduates and school leavers during the summer may bring some impact. The government is also closely monitoring the potential implications of the external uncertainties on corporate hiring sentiment,” Secretary for Labor and Welfare Chris Sun Yuk-han said in the Friday government statement.
Tristen Zhuo, chief economist at the Bank of East Asia, said the Hong Kong consumer sector maintains its upward trend, marked by four consecutive quarters of private consumption growth and a recovery in retail sales partially driven by a resurgence in tourism.
