Businesses predict economic gloom
Most SAR business people expect the economy to continue to struggle next year, then pick up steam in 2004, according to a survey by the Hong Kong General Chamber of Commerce.
About 42 per cent of respondents believe economic growth in 2003 will be the same as this year, while about 36 per cent think it will be even worse next year, the annual poll found. That compares with almost 15 per cent who expect the economy to improve.
'I found the outcome this year a little less upbeat than I thought it would be. I suspect this has to do a great deal with the uncertainties there are in the global economy at the moment,' said Ian Perkin, the chamber's chief economist.
'The domestic economy of Hong Kong . . . is still extraordinarily weak and has been so since the Asian financial crisis of 1997. You only have to look at the performance of retail sales, the consumption sector and you can see how weak the economy really is,' he said.
The chamber forecast two per cent economic growth for Hong Kong this year, which Mr Perkin predicted would not be met.
In the longer term, there is more optimism, with about 42 per cent of businesses expecting the economy to strengthen in 2004, while 30 per cent think it will stay the same. Another 20 per cent think it will weaken.
'The further you look out, people always become more optimistic, and there's optimism that the problems facing the world both politically and economically will be over by the end of 2003, early 2004,' Mr Perkin said.
The survey, first made in 1998, asked 41 questions covering seven categories, including economic and business conditions, Hong Kong's competitiveness, the government's role and relations with China. The chamber received responses from 361 of the 3,325 businesses it polled. It will release its own economic forecasts next week.
Many companies are also unhappy about the government. About three quarters of respondents said they were dissatisfied with its performance and more than half said it should take a more active role in the economy. But Mr Perkin said the number of people unhappy with the government was the same as in previous polls, and that people were using the survey's anonymity to voice their frustration.
'Our members are extremely worried about the state of the economy . . . [and] the decision-making process of the government, which they deal with on a day-to-day basis,' he said.
Eden Woon Yi-teng, the chamber's chief executive, added that while businesses should not rely totally on the government, 'it is true that the government has to do more today than it did six, seven years ago'. He did not elaborate.
Asked about economic growth next year, respondents were about evenly split on whether it would grow one to three per cent, stay flat or shrink one to three per cent.
Companies were quite pessimistic about the employment situation next year, with about half saying they expected employment to fall, 36 per cent believing it will stay the same and 15 per cent expecting an increase. But they expect an improvement in 2004.
Pay rates are also going to be fairly steady next year, the survey found. More than half of businesses said they would keep salaries frozen while 36 per cent will give more performance-based bonuses. Only 3.4 per cent said they would raise pay.
Graphic: SRVV22GET
