Many firms expect HK economy to rebound next year
With stock and property prices rebounding, many firms expect the Hong Kong economy to expand as early as next year, surveys conducted over the past four months show.
The findings reflect growing sentiment in the business community that the worst of the global financial meltdown is over.
Of the 164 firms surveyed by Deloitte Touche Tohmatsu's mainland unit and CPA Australia Hong Kong China Division, more than half expected the local economy to start growing again next year.
Almost 55 per cent predicted the Hang Seng Index would end the year at between 17,000 and 20,000 points or higher. The index surged almost 3 per cent yesterday to close at 19,817.70.
Some 36.6 per cent of the firms also expect property prices to improve next year.
Compared with the severe acute respiratory syndrome outbreak in 2003, the current downturn was unlikely to see the annual number of bankruptcy orders surge beyond 25,000 or the number of compulsory windings-up top the peak of 1,200 a year, according to about 80 per cent of the respondents.
Despite the growing optimism, Derek Lai, Asia Leader of Reorganisation Services at Deloitte China, warned companies to be wary.
'In terms of industries, respondents generally agree that banking and finance, air and transportation services, and manufacturing are the most affected sectors during the current financial crisis. From our observation, the export-driven manufacturing sector will remain fragile in the near term,' he said.
Economists are monitoring household savings rates, especially in major markets such as the United States, as it indicates the demand for goods and services, much being sourced from Asian economies such as the mainland and Hong Kong.
The US savings rate jumped from zero in April last year to 6.9 per cent this May, a 141/2-year high, as households reined in spending.
The weak demand for goods and services in Hong Kong has forced many companies to shed jobs. In an HSBC Insurance poll of 261 employers and 617 employees in March, 17 per cent of employees cited poor company performance as the main reason for leaving their job.
Strong performance and stability was the No 1 reason for 27 per cent of employees staying in their jobs.
