Smaller Hong Kong businesses upbeat about their prospects as retailing and tourism pick up
Survey finds companies see revenue growth of up to 10 per cent this year
Hong Kong’s medium-sized companies are turning optimistic about their business prospects this year thanks to stronger retail and tourism sectors, a survey has found.
Almost two-thirds of executives at medium-sized firms, defined as those with annual revenues between US$1 million and US$3 billion, surveyed by accounting firm Ernst & Young (EY) expected their revenues to expand between 6 per cent and 10 per cent for the coming year, up 23 percentage points from last year. Another one-third expected the growth rate to exceed 10 per cent.
“Retail businesses are doing very well and consumption is growing. A falling unemployment rate and a booming tourism sector also contributed to the optimistic sentiment,” said Agnes Chan, managing partner of EY’s business in Hong Kong and Macau.
The survey was conducted online from January to March with executives at over 100 firms in Hong Kong. Almost one-third of the firms are in the retail business, 16 per cent are in media and entertainment and 15 per cent are real estate and construction firms, with the rest in industries ranging from financial services to life sciences.
At the beginning of this year Hong Kong’s finance secretary, Paul Chan, forecast the city’s economy would grow between 3 and 4 per cent this year.
The city’s retail sector, which took a hit when the number of tourists from mainland China plunged between 2015 and 2016, is now thriving. The value of total retail sales in Hong Kong reached HK$40.5 billion (US$5.16 billion) in May, jumping 12.9 per cent from the same month last year, official statistics showed. Retail sales surged by 13.7 per cent in the first five months of this year from the same period last year.