The latest Standard Chartered Greater Bay Area Business Confidence Index (GBAI), jointly released by Standard Chartered and the Hong Kong Trade Development Council (HKTDC), indicates that business sentiment in the Greater Bay Area remained steady in the fourth quarter of 2025 despite ongoing external uncertainties. The "current performance" index retreated to 50.3 from 54.7 in the previous quarter, while the "expectations" index dropped to 51 from 55.7. However, both indices remained above the 50 threshold, signaling expansionary territory and a broadly positive outlook among GBA businesses.
The moderation was attributed to diminishing returns from front-loading activities and a more cautious approach to investment and capacity utilization. Sub-indices for "current performance" showed mixed results, with "new orders," "fixed asset investment," and "profit" falling below 50. In contrast, "expectations" sub-indices for "production/sales," "new orders," and "profits" stayed in expansionary territory, suggesting robust demand may persist into early 2026.
Hong Kong stood out among GBA cities, with its "current performance" sub-index rising 5.7 points to 57.9 and "expectations" up 1.8 points to 55.4. This was driven by strong performance in the professional services and retail/wholesale sectors. Wing Chu, Deputy Director of Research at HKTDC, noted that the extension of the US-China trade truce has supported Hong Kong's recovery, allowing it to outperform peer cities. "This momentum in Hong Kong's recovery is expected to remain intact, supported by buoyant business activity and the professional services sector's solid performance," he said.
The survey also explored GBA businesses' interest in expanding into the Middle East, finding that over half of respondents (54.8%) expressed interest, with the UAE (53.9%) and Saudi Arabia (53.2%) as top priority markets. Among those interested, nearly 60% were engaged in trading/distribution, followed by manufacturing (42.7%) and logistics/storage (28.3%). Despite optimism, businesses identified key challenges: lack of understanding of local laws and regulations (50.4%), opaque regulatory environments and restrictions on foreign investment (43.1%), and cultural and business differences (42%).
Notably, 99.2% of respondents considered Hong Kong's professional services crucial for successful Middle East expansion, particularly for navigating regulatory and compliance requirements. Hunter Chan, Economist, Greater China at Standard Chartered, emphasized that the survey aligns with Hong Kong's policy focus on deepening economic ties with the Middle East. "With its advantage in professional services, Hong Kong can further leverage its unique position as a 'super-connector,' becoming a springboard for enterprises to develop overseas markets," he said.
For more details, the full report is available at Standard Chartered GBA Business Confidence Index Report and HKTDC Research at HKTDC Research.
