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 (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, financing, and capacity utilisation amid ongoing external uncertainties.
The “current performance” index for business activity in Q4 retreated to 50.3 from 54.7 in Q3, while the “expectations” index dropped to 51 from 55.7. However, both indices remained above the 50 threshold, indicating expansionary territory and a broadly positive outlook among GBA businesses. Sub-indices presented a mixed picture: for “current performance”, the “new orders”, “fixed asset investment”, and “profit” sub-indices fell below 50, seen as a correction after front-loading in earlier quarters. Conversely, “expectations” remained positive, with sub-indices for “production/sales”, “new orders”, and “profits” staying in expansionary territory, suggesting robust demand is likely to persist through early 2026.
Hong Kong’s readings outperformed the survey average, confirming the city’s economic rebound remained on course. The “current performance” sub-index for Hong Kong rose 5.7 points to 57.9, and the “expectations” reading increased 1.8 points to 55.4. This sustained recovery was attributed to the city’s “professional services” and “retail/wholesale” sectors. Wing Chu, Deputy Director of Research at HKTDC, noted that following the extension of the US-China trade truce, business sentiment in Hong Kong continued to improve, allowing the city to outperform its GBA peers. “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,” Chu said.
The survey also examined GBA businesses’ interest in expanding into the Middle East, revealing that over half of respondents (54.8%) expressed interest, with the UAE (53.9%) and Saudi Arabia (53.2%) as top priority markets. Among companies 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 local regulatory environment and restrictions on foreign investment” (43.1%), and “cultural and business differences” (42%). To manage these, 99.2% of respondents considered Hong Kong’s world-class services pivotal, particularly its professional services sector in navigating regulatory and compliance requirements.
Hunter Chan, Economist, Greater China at Standard Chartered, highlighted that with complex geopolitical risks, global corporates are diversifying supply chains and exploring new markets, giving rise to emerging trade corridors. “The thematic survey found that GBA corporates are interested in entering the Middle East, which aligns with Hong Kong Government’s policy focus to set up the ‘GoGlobal Task Force’ to leverage Hong Kong’s advantages as a ‘go global’ platform,” Chan said. He added that almost all respondents indicated Hong Kong services are needed to address challenges posed by local regulations and cultural differences, allowing Hong Kong to leverage its unique position as a ‘super-connector’ for enterprises developing overseas markets.
The GBAI is a forward-looking quarterly survey jointly presented by Standard Chartered and HKTDC, examining business sentiment and synergistic effects in the GBA. It compiles over 1,000 responses from GBA companies and includes five sub-indices covering manufacturing, retail, financial services, professional services, and innovation & technology. The full report is available at the Standard Chartered GBA Business Confidence Index Report, and additional insights can be found at HKTDC Research.
