Gloomy new year for Hong Kong

Only 6 in 10 small businesses owners see growth in 2013.

Rising operating costs and economic uncertainty are sapping the optimism of small business owners in Hong Kong, making them the least confident among their peers in Asia Pacific, said a survey by accounting organization CPA Australia.

Only 59% see business expansion or growth in 2013 compared to 71% in Singapore and 94% in Indonesia. This pessimism has led 83% of Hong Kong respondents to consider additional funding in 2013. The survey involved interviews with 250 small businesses with less than 20 employees in Hong Kong.

Patrick Yeung, divisional past president of Greater China from CPA Australia, said the findings are worrying signs for the Hong Kong economy in which small businesses appear to want to borrow their way out of a tough business environment marked by very expensive rents and services.

Among small Hong Kong businesses that intend to seek financing next year, 39% said this will be necessary to allow their businesses to survive, while 37% said funding would cover rising expenses.

Less than a third of these businesses said they would need additional funds to purchase assets and only 10% of them said they would seek financing to buy stocks.

Small businesses also indicated the least possibility of employing more people in 2013. This finding confirms government estimates that the job market in Hong Kong will become tougher after staying in a state of full employment for most of this year.