Two-thirds of accountants expect recession spill-over into 2020

2 in 5 expect GDP to decline by over 1%.

About 66% of professionals from the accounting and finance sector expect Hong Kong’s economy to contract in 2020, whilst 73% believe that the city’s competitiveness will decline, according to a survey by CPA Australia.

This represents a significant decrease in economic confidence from previous years, when only 20% of respondents expected Hong Kong's economy to contract in 2019 and 4% in 2018.

GDP is projected to decline by more than 1% by 43% of professionals, a shift to negative sentiment compared to last year, when the favored outlook was for GDP to expand by 2.9% in 2019.

In the jobs market, a third (30%) of respondents indicated that company headcounts will be culled in 2020, although two-thirds of respondents (66%) believe that their company's headcount will either remain the same or increase next year.

Meanwhile, an overwhelming majority or 90% of professionals expecting retail property prices to decline next year, more than double the points of the 42% of respondents who indicated the same for 2019. The share of respondents who believe retail property prices will decline by more than 11% in 2020 increased to 65% from only 24% in 2019.

In preparation for the gloomier year, accounting and finance professionals expect businesses to shift their focus to cost management as well as to invest in innovation and technology.

"The survey findings show that 2020 should be a challenging year for business. It is therefore not surprising that half of our accounting and finance respondents believe that 'cost management' will be their company's key strategic focus for 2020,” said Roy Lo, divisional president of greater China of CPA Australia.

"Additionally, 'investing in innovation and technology', which may enhance productivity and transform business models is the second most popular choice (30%). This type of investment indicates that companies are eyeing long-term growth and are seeking to stay ahead of continual technology disruption,” he added.