Regus' Business Confidence Index finds that rising optimism is increasing business spend in Hong Kong.
A positive outlook from Hong Kong business is now matched by real results, says the Regus Business Confidence Index. Business confidence has grown since 2010, but is now accompanied in Hong Kong by reports that revenues and profits are increasing in line with expectations expressed in last year's Index. The research also reveals that departmental spending is on the rise, specifically sales and marketing costs but not those related to premises and property.
- The Regus Business Confidence Index now stands at 125 points, an all-time high;
- The index is up 31 points on its lowest trough in April 2010 and 25 points since October 2009, when the survey began;
- In Hong Kong, the index reveals a higher than average rating of 139;
- Over three fifths of companies in Hong Kong report healthy profit growth (67 per cent) as well as a rise in revenues (72 per cent)
Departmental spending is predicted to rise this year, with the exception of property, where companies are maintaining strict cost control policies. Globally, 81 per cent of companies expect to freeze or cut their property spending and in Hong Kong, that figure stands at 75 per cent. This matches other research studies which reveal a general trend towards lower cost working practices.
"That Business Confidence is returning is great news as is the fact that so many companies are reporting rising revenues and profit,” commented Hans Leijten, Regus' regional vice president for East Asia. “Planned departmental spending increases for 2011 provide further confirmation of returning confidence.”
He added, “However, it would seem that firms are only investing where there is a clear bottom line return, such as sales and marketing, whereas spending on property will continue to decline in 2011. This is a remarkable change on just a few years ago, when the combination of economic upturn and increasing employment would have generated a boom in traditional commercial property spending. However, after finding themselves exposed in the recession, businesses now prefer to minimise risk and opt for more flexible and scaleable arrangements."
The report is based on the opinions of over 17,000 companies across 80 countries, including over 200 in Hong Kong.
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