Business expectations for the first quarter of 2024
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The Census and Statistics Department (C&SD) released today (January 19) the results of the Quarterly Business Tendency Survey for the first quarter (Q1) of 2024.
Business situation
For all surveyed sectors taken together, the proportion of respondents expecting their business situation to be better (13%) in Q1 2024 over the preceding quarter is slightly higher than that expecting it to be worse (12%).
When compared with the results of the Q4 2023 survey round, the proportion of respondents expecting a better business situation in Q1 2024 is 13%, lower than the corresponding proportion of 17% in Q4 2023. On the other hand, the proportion of respondents expecting a worse business situation has increased from 9% in Q4 2023 to 12% in Q1 2024.
Analysed by sector, respondents in most of the surveyed sectors expect their business situation to increase on balance or remain broadly unchanged in Q1 2024 as compared with Q4 2023. In particular, more respondents in the financing and insurance sector expect their business situation to be better in Q1 2024 as compared with Q4 2023.
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 December 1, 2023 to January 8, 2024.
Volume of business/output
Respondents in quite a number of the surveyed sectors expect their volume of business/output to increase on balance or remain broadly unchanged in Q1 2024 as compared with Q4 2023. In particular, more respondents in the financing and insurance and retail sectors expect their volume of business/sales to increase in Q1 2024 over Q4 2023. On the other hand, more respondents in the construction sector expect their volume of construction output to decrease, as compared to those expecting it to increase.
Employment
Respondents in most of the surveyed sectors expect their employment to increase on balance or remain broadly unchanged in Q1 2024 as compared with Q4 2023. In particular, more respondents in the accommodation and food services, manufacturing, financing and insurance and real estate sectors expect their employment to increase in Q1 2024 over Q4 2023. On the other hand, more respondents in the information and communications sector expect their employment to decrease, as compared to those expecting it to increase.
Selling price/service charge
Respondents in most of the surveyed sectors expect their selling prices/service charges to remain broadly unchanged in Q1 2024 as compared with Q4 2023. In the accommodation and food services sector, however, more respondents expect their charges for services rendered/prices of food provided to go up in Q1 2024 over Q4 2023.
Commentary
A Government spokesman said that business sentiment among large enterprises showed some softening as compared to three months ago, but remained positive in overall terms. Large enterprises’ appetite for hiring also stayed positive.
Looking forward, the spokesman said that further recovery of consumption- and tourism-related activities should support business outlook, though the difficult external environment and tight financial conditions will continue to dampen sentiment. The Government will monitor the situation closely.
Further information
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 2023 to Q1 2024.
Table 1 shows the net balances of views on expectations in respect of different variables for Q1 2024.
The survey results are published in greater detail in the “Report on Quarterly Business Tendency Survey, Q1 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).