HK firms say worst is over but US economy, pollution still a worry
Most companies are optimistic about the economic climate in Hong Kong next year, although concerns remain over government support for businesses and external factors like the weakness of the US economy and pollution, according to a survey by accounting body CPA Australia.
The annual study, which interviewed 222 members across a range of sectors, reveals that most believe the worst of the economic crisis is over, with almost two-thirds of respondents predicting a satisfactory outlook for the city in 2010.
More than 23 per cent said they would expand operations next year, with 87.7 per cent saying they would increase salaries.
Just over 16 per cent indicated that more liberal credit facilities provided by banks would be one of the main drivers for economic growth in the city, along with a strengthening of Hong Kong as a key listing destination, the continuation of the government's stimulus package and a buoyant property market.
'Continuing support towards business, in particular [small and medium-sized enterprises], is clearly seen as being important for 2010, especially as respondents are forecasting increases to staff salaries and office rent next year, so easier access to finance will be crucial,' said Loretta Shuen Leung Lai-sheung, president of CPA Australia Hong Kong China division.
However, fears over the ensuing weakness of the US dollar and economy continued to dampen optimism, with 32 per cent of respondents supporting a Hong Kong dollar peg to the yuan rather than the greenback, a 2 per cent rise from last year.
'Hong Kong remains an outward-looking economy, so the external environment will always be a big concern for businesses. This is not something that Hong Kong can unilaterally change,' said Charles Wong Wai-chung, a councillor with CPA Australia's local division.
The US economy's deterioration was the biggest single external factor affecting the profit margins of 44 per cent of respondents this year. The slowdown of mainland exports came in second at 18.5 per cent. Pollution was named as the biggest barrier affecting Hong Kong's competitiveness by 41.4 per cent of respondents.
