Hong Kong businesses are more downbeat about their prospects for 2019, with 76% of respondents to a survey from the Hong Kong General Chamber of Commerce expecting economic growth of below 3%.
The survey found that more than half of the respondents expecting muted growth in 2019 anticipate growth of less than 2%.
Respondents from the transport and logistics, manufacturing, and trading sectors were most pessimistic about their revenue prospects for the next 12 months, reflecting ongoing concerns about the impact of the US-China trade war.
The pace of local interest rate normalization is also adding to uncertainty over Hong Kong's economic prospects. This issue, as well as rising operating costs, industry competition, and talent availability were cited as the major challenges being faced by Hong Kong businesses.
Hiring intentions are also muted, with only 51% of respondents stating that they plan to hire more staff in Hong Kong, compared to 61% of respondents to last year's survey. In addition, only 33% plan to make additional capital investment in the city, down from 48% last year.
“Despite the fact that Hong Kong’s economic momentum may have started to slow, we are not surprised that roughly half of our survey respondents are still planning to hire more staff, given that manpower shortages exist in a wide range of sectors amid a very tight labour market,” HKGCC chairman Aron Hariela said.
In terms of Hong Kong’s competitiveness, respondents were more positive about the city’s traditional advantages such as flow of information, legal system, tax regime and physical infrastructure, which the HKGCC said puts Hong Kong in a unique position to capitalize on the Greater Bay Area development.
But respondents saw room for improvement in areas including innovation and technology, as well as the cost of doing business.
“The Chamber has been working on ways to tackle these challenges in recent years. The results of our survey will further encourage our efforts in calling for the removal of bottlenecks in the three key areas of regulation, land and labor,” HKGCC CEO Shirley Yuen said.