Gloom weighs on Hong Kong as 40 per cent of small businesses see city’s economy worsening in the next 12 months, survey shows

Over 40 per cent of Hong Kong’s small and medium enterprises expect the local economy to worsen in the next 12 months from June

70 per cent of them are concerned about global economic growth, compared to 56 per cent of all 13 markets surveyed

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Shoppers at the Causeway Bay shopping district in Hong Kong on July 22, 2014. Photo: Reuters

Published: 7:15pm, 16 Oct 2019Updated: 10:05pm, 16 Oct 2019

Four in 10 of Hong Kong’s small businesses expect the city’s economy to worsen in the next 12 months, according to a survey by Bibby Financial Services and Euler Hermes.

Hong Kong is also the least optimistic about global economic growth among 13 markets surveyed, including Singapore, US and UK, according to the survey of companies, most with fewer than 10 employees.

The findings illustrate how Hong Kong’s economy is heading for a technical recession in the fiscal third quarter ending in December, as four consecutive months of street protests have deterred visitors, dented retail sales and consumption.

Small businesses, which provide employment for 1.3 million people in Hong Kong, or half of the city’s workforce excluding the civil service, are particularly vulnerable to the economic downturn. They comprised up to 98 per cent of all business units in the city as of June, according to the Support and Consultation Centre for Small and Medium Enterprises, a government agency.

Only 16 per cent of respondents found the government’s policies favourable to them, with 38 per cent of them calling for further government support to find funding.

“The government has the intention of helping companies, but it seems to not be doing it the right way,” said Simon Pun, chairman and CEO of PACE Supply Chain International, with 11 employees, in Tsuen Wan. “The worst thing is that we don’t know how long we still need to struggle.”