Current Business Situation
For all surveyed sectors taken together, the proportion of respondents expecting their business situation to be better (19%) in Q1 2023 over the preceding quarter is higher than that expecting it to be worse (13%).
When compared with the results of the Q4 2022 survey round, the proportion of respondents expecting a better business situation in Q1 2023 is 19%, higher than the corresponding proportion of 16% in Q4 2022.
On the other hand, the proportion of respondents expecting a worse business situation has slightly increased from 12% in Q4 2022 to 13% in Q1 2023.
Analysed by sector, while the number of the surveyed sectors with respondents expecting their business situation to be better on balance in Q1 2023 as compared with Q4 2022 is the same as the number of surveyed sectors expecting a worse business situation, significantly more respondents in the accommodation and food services, financing and insurance and manufacturing sectors expect their business situation to be better in Q1 2023 as compared with Q4 2022.
Survey Results Should be Interpreted with Care.
In this type of survey on expectations, the views collected in the survey are affected by the events in the community occurring around the time of enumeration, and it is difficult to establish precisely the extent to which respondents’ perception of the future accords with the underlying trends.
The enumeration period for this survey round was from December 2, 2022 to January 9, 2023.
Volume of Business
Respondents in most of the surveyed sectors expect their volume of business/output to increase on balance or remain broadly unchanged in Q1 2023 as compared with Q4 2022.
In particular, significantly more respondents in the accommodation and food services, manufacturing and financing and insurance sectors expect their volume of business/production to increase in Q1 2023 over Q4 2022.
Respondents in all of the surveyed sectors expect their employment to remain broadly unchanged or increase on balance in Q1 2023 as compared with Q4 2022.
An example being more respondents in the accommodation and food services sector and the construction sector expect their employment to increase in Q1 2023 over Q4 2022.
Prices and Service Charges
Respondents in most of the surveyed sectors expect their selling prices/service charges to increase on balance or remain broadly unchanged in Q1 2023 as compared with Q4 2022.
It was noted that significantly more respondents in the accommodation and food services sector expect their prices of food provided/charges for services rendered to go up in Q1 2023 over Q4 2022.
A Government spokesman said that overall business sentiment among large enterprises improved slightly as compared to three months ago, though mixed performance was seen across different sectors. Large enterprises’ appetite for hiring stayed largely positive.
Looking forward, the spokesman pointed out that the removal of most local social distancing measures and the progressive resumption of normal travel between the Mainland and Hong Kong should provide support to business sentiment, though tightened financial conditions and the deteriorating global economic outlook will continue to bring uncertainties.
The Government is monitoring this situation closely.
The survey gathers views on short-term business performance from the senior management of about 570 prominent establishments in various sectors in Hong Kong with a view to providing a quick reference, with minimum time lag, for predicting the short-term future economic performance of the local economy.
The survey covers 10 major sectors in Hong Kong, namely manufacturing; construction; import/export trade and wholesale; retail; accommodation and food services (mainly covering services rendered by hotels and restaurants); transportation, storage and courier services; information and communications; financing and insurance; real estate; and professional and business services sectors.
Views collected in the survey refer only to those of respondents on their own establishments rather than those on the respective sectors they are engaged in, and are limited to the expected direction of quarter-to-quarter change (e.g. “up”, “same” or “down”) but not the magnitude of change.
In collecting views on the quarter-to-quarter changes, if the variable in question is subject to seasonal variations, respondents are asked to provide the expected changes after excluding the normal seasonal variations.
Survey results are generally presented as “net balance”, i.e. the difference between the percentage of respondents choosing “up” and that choosing “down”. The percentage distribution of respondents among various response categories (e.g. “up”, “same” and “down”) reflects how varied their business expectations are.
The “net balance”, with its appropriate sign, indicates the direction of expected change in the variable concerned. A positive sign indicates a likely upward trend while a negative sign indicates a likely downward trend.
However, the magnitude of the “net balance” reflects only the prevalence of optimism or pessimism, but not the magnitude of expected change, since information relating to such magnitude is not collected in the survey.
Furthermore, owing to sample size constraint, care should be taken in interpreting survey results involving a small percentage (e.g. less than 10%) of respondents in individual sectors.
Chart 1 shows the views on expected changes in business situation for the period Q1 2022 to Q1 2023.
Table 1 shows the net balances of views on expectations in respect of different variables for Q1 2023.
The survey results are published in greater detail in the “Report on Quarterly Business Tendency Survey, Q1 2023”.
The official report can be downloaded from the C&SD website: Click Here
Sources: THX News & Hong Kong Government.