Business confidence in Hong Kong continued to grow steadily over the last six months, while mainland China recorded a slight decline, putting the SAR above the mainland in the latest Regus Business Confidence Index (RBCI) global ranking. In Hong Kong, business confidence has risen from 121 index points in April this year to 126 points now, while China saw a 2-point fall, from 123 to 121.
While both markets remain well above the global average of 113, their movements mirror a global trend of mature economies showing increasing confidence compared to a more tempered outlook in emerging economies. The latest RBCI survey of more than 20,000 senior executives in 95 countries found that, on average, confidence levels have risen by five points to 109 in mature economies, while emerging markets have seen a drop of nine points to 117.
Sixty-five per cent of Hong Kong respondents reported that their company revenues had risen over the past year, and 75 per cent predicted increasing revenues over the coming year – a further sign of Hong Kong's increasingly bullish outlook. While both of these figures are roughly in line with the mainland China figures (69 and 78 per cent respectively), only 24 per cent of mainland respondents agreed with the statement "I believe that economic recovery is advancing strongly in my country at present", with 38 per cent believing that that economic recovery would not advance strongly until the second half of 2014.
Globally, although the overall outlook remains uncertain, mature economies are catching up with emerging markets. The best-performing mature economies are Germany at 131 (up one point) and the USA at 119 (up eight). Among emerging economies, India is the highest in the global ranking, followed by Brazil: both countries scored 129 index points, remaining comfortably above China despite seeing bigger falls in the last six months.
"While mature economies are showing greater confidence as their economic outlook turns positive, emerging markets are seeing slower growth, and looking for ways to manage costs and boost productivity," said John Henderson, Chief Financial Officer, Regus Asia-Pacific. "Particularly in China, companies see better staff retention as a way to achieve this, along with finding more affordable service providers and achieving better returns on their marketing spend. Despite its more buoyant outlook, Hong Kong still grapples with notoriously high commercial rents, and almost 30 percent of respondents are looking to reduce their fixed office workspace."
For Hong Kong-based Regus client Qevin Leung, flexibility was vital when he and his business partners decided to set up their own import/export company early this year. "The company has three employees, and if we had our own office, it would be costly," he said. "Using Regus keeps us relatively lean."