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 across the Greater Bay Area (GBA) remained steady in the fourth quarter of 2025 despite persistent external uncertainties. Following a rebound in the previous quarter, the indices experienced a moderate quarter-on-quarter retreat, attributed to diminishing returns from front-loading activities and a more cautious approach to investment and capacity utilization.
The 'current performance' index for business activity in Q4 retreated to 50.3 from 54.7 in the previous quarter, while the 'expectations' index dropped to 51 from 55.7. Despite the decline, both indices remained above the 50 watershed level, signaling expansionary territory and a broadly positive outlook among GBA businesses. Sub-indices revealed a mixed picture: 'new orders,' 'fixed asset investment,' and 'profit' fell below 50 for current performance, seen as a correction after earlier front-loading. However, expectations remained upbeat, with sub-indices for 'production/sales,' 'new orders,' and 'profits' staying in expansionary territory, suggesting robust demand may persist into early 2026.
Hong Kong outperformed other GBA cities, with its 'current performance' sub-index rising 5.7 points to 57.9 and 'expectations' up 1.8 points to 55.4. Wing Chu, Deputy Director of Research at HKTDC, attributed this to the city's professional services and retail/wholesale sectors, stating, 'Following the extension of the trade truce between the US and China, business sentiment in Hong Kong continued to improve, allowing the city to outperform its peer cities across the GBA.' He added that the HKTDC will support GBA enterprises in leveraging Hong Kong's professional services to 'go global.'
The survey also explored GBA businesses' interest in expanding into the Middle East, with over half (54.8%) expressing interest. The UAE (53.9%) and Saudi Arabia (53.2%) were top priority markets. Among interested companies, nearly 60% were engaged in trading/distribution, followed by manufacturing (42.7%) and logistics/storage (28.3%). However, businesses identified key challenges: 'lack of understanding of local laws and regulations' (50.4%), 'opaque local regulatory environment and restrictions on foreign investment' (43.1%), and 'cultural and business differences' (42%). To address these, 99.2% of respondents considered Hong Kong's services crucial, particularly its professional services for navigating regulatory and compliance requirements.
Hunter Chan, Economist, Greater China at Standard Chartered, noted, 'The thematic survey found that GBA corporates are interested in entering the Middle East, which aligns with the Hong Kong Government's policy focus to set up the ‘GoGlobal Task Force’ to leverage Hong Kong’s advantages as a ‘go global’ platform.' He emphasized that Hong Kong can serve as a 'super-connector' and springboard for enterprises developing overseas markets. The full report is available at Standard Chartered GBA Business Confidence Index Report and HKTDC Research at HKTDC Research.
