Business expectations for the fourth quarter of 2024
The Census and Statistics Department (C&SD) released today (October 25) the results of the Quarterly Business Tendency Survey for the fourth quarter (Q4) of 2024.
Business situation
For all surveyed sectors taken together, the proportion of respondents expecting their business situation to be better (13%) in Q4 2024 over the preceding quarter is lower than that expecting it to be worse (16%).
When compared with the results of the Q3 2024 survey round, the proportion of respondents expecting a better business situation in Q4 2024 is 13%, higher than the corresponding proportion of 11% in Q3 2024, while the proportion of respondents expecting a worse business situation had increased from 12% in Q3 2024 to 16% in Q4 2024.
Analysed by sector, respondents in most of the surveyed sectors expect their business situation to decrease on balance or remain broadly unchanged in Q4 2024 as compared with Q3 2024. In particular, more respondents in the retail, manufacturing and construction sectors expect their business situation to be worse in Q4 2024 as compared with Q3 2024.
The results of the survey 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 September 3, 2024 to October 15, 2024.
Volume of business/output
Respondents in all of the surveyed sectors expect their volume of business/output to decrease on balance or remain broadly unchanged in Q4 2024 as compared with Q3 2024. In particular, more respondents in the construction, retail and manufacturing sectors expect their volume of construction output/sales/production to decrease in Q4 2024 over Q3 2024.
Employment
Respondents in quite a number of the surveyed sectors expect their employment to remain broadly unchanged in Q4 2024 as compared with Q3 2024. Nevertheless, more respondents in the transportation, storage and courier services sector expect their employment to increase, as compared to those expecting it to decrease.
Selling price/service charge
Respondents in most of the surveyed sectors expect their selling prices/service charges to remain broadly unchanged in Q4 2024 as compared with Q3 2024. In the construction and manufacturing sectors, however, more respondents expect their tender prices/selling prices to go down in Q4 2024 over Q3 2024.
Commentary
A Government spokesman said that large enterprises' overall business sentiment for the fourth quarter remained soft. Meanwhile, large enterprises' appetite for hiring varied across sectors, but stayed largely steady in overall terms.
Looking forward, the spokesman said that the gradually easing financial conditions, the Central Government's latest policy measures for supporting the Mainland economy as well as its various measures benefitting Hong Kong should bode well for business sentiment, though global economic uncertainties and trade conflicts may pose some negative impacts. The Government will monitor the situation closely.
Further information
The survey gathers views on short-term business performance from the senior management of about 550 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 Q4 2023 to Q4 2024.
Table 1 shows the net balances of views on expectations in respect of different variables for Q4 2024.
The survey results are published in greater detail in the "Report on Quarterly Business Tendency Survey, Q4 2024". Users can browse and download the publication at the website of the C&SD (www.censtatd.gov.hk/en/EIndexbySubject.html?pcode=B1110008&scode=300).
Users who have enquiries about the survey results may contact the Business Expectation Statistics Section of the C&SD (Tel: 3903 7263; email: business-prospects@censtatd.gov.hk).
