Hong Kong business sentiment up while the world remains wary

HK's optimism rose 28% in Q4 while global average fell 4%.

Business optimism in Hong Kong has been on a steady rise for the third consecutive quarter, according to the latest Grant Thornton International Business Report (IBR). Hong Kong business optimism has seen a rise to net 28% in Q4 from 12% in Q3, showing a confident of economic recovery in 2013.

Mixed picture in global optimism

Global business optimism has continued to fall to net 4% in Q4 from 23% in the earlier half of 2012 (Q2). This has been largely driven by a huge fall in the world’s largest economy, the United States (from 50% in Q2 to -4% in Q4).

Although uncertainties are still looming on global economy after the US fiscal cliff deal and the sovereign debt crisis in the eurozone, the IBR shows a very different picture in the emerging markets. Mainland Chinese business optimism is on the steady rise from 19% in Q4 from a slowdown in Q3 (11%). The Latin America remained relatively stable over the last quarter, and actually increased to 69% in Q4, up from 64% in Q3. The BRIC economies (29% to 39%) also remained consistently optimistic, while Asia Pacific (excl. Japan) has seen a rise from 20% to 28% over the same period.

Daniel Lin, managing partner at Grant Thornton Hong Kong, said: “After the US election and the change of leadership in China, businesses in Hong Kong and the wider Asia have a better and clearer picture of the challenges ahead in 2013. More, Hong Kong GDP growth has been forecasted to double to around 3% in 2013, which goes in line with our IBR results of improving business optimism.”

“I’m certainly glad to see business remain confident to the future; however, as Hong Kong is such an outward-oriented economy, businesses should keep on being more prudent when making hiring and investment decisions.”