While most businesses in the Greater Bay Area (GBA) fared better in the first quarter of this year than they were doing at the end of 2023, the latest GBA Business Confidence Index says that the “rising tide [has] yet to lift the expectations boat.”
Production and sales, new orders and profits all outperformed expectations at businesses surveyed in the first quarter, according to the index.
However, other indices – including prices of finished goods, investment in fixed assets and financing scale – underperformed.
“[That] is a clear sign of still-cautious business sentiment,” the report said. “With the prevailing recovery momentum still looking fragile, we see room for more policy support to continue to narrow the output gap and dispel deflation expectations.”
[See more: China is in danger of deflation, experts say]
The results were not even across the GBA’s cities. Hong Kong saw the biggest drop in business activity since the previous quarter (Foshan saw a comparatively small drop), while Guangzhau, Shenzhen and Dongguan experienced healthy increases.
The index grouped Macao together with “other cities” and they collectively saw a 0.1 point increase, slightly exceeding expectations.
Hong Kong’s lagging performance and pessimism was mainly due to high US interest rates weighing on import and export businesses, The Standard reported.
Published on Tuesday, the index is based on quarterly surveys of over 1,000 companies operating in GBA, conducted by Standard Chartered Bank and the Hong Kong Trade Development Council.
