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Hong Kong businesses growing slowly

Anuradha Shukla | April 3, 2012
Business confidence dips and smaller number of organisations report revenue, according to Regus Business Confidence Index.

Businesses in Hong Kong are experiencing slow growth and a smaller number of organisations have reported either revenue or profit growth since September 2011.

Hong Kong business confidence has slipped back 27 Index points to 111 during the last six months, according to the global Regus Business Confidence Index.

The Index also indicates that the number of firms reporting profit growth has also dropped to 40 percent, a fall of 20 percent compared to six months ago.

The decrease of profit and confidence have encouraged businesses to search for new ways to reduce operating costs and the survey respondents are evaluating several options to this end such as shortening of supply chains, making increased use of IT cloud applications and increasing flexible workspace.

"In the current climate, I believe they are right to focus on controlling their costs, but it's interesting to note that they are doing so in ways that won't constrain future growth," said Hans Leijten, Regus' vice president, East Asia.

"From harnessing efficient IT solutions through to providing more flexible working conditions for staff, Hong Kong businesses clearly recognise the need to be nimble and scalable. This perhaps implies a greater level of underlying confidence than these results suggest."

Business stability

The global Regus Business Confidence Index is a measurement formed on an aggregate of positive and forward-looking statements combining year-to-date revenue and profit trends with views on the expected economic upturn in the coming months. The Index aims to provide businesses with a single point of reference of the survey's key findings.

The newly released Index shows that Hong Kong companies identified high office rents (53 percent) and lack of access to capital (53 percent) as the main reasons for corporate distress during the global economic downturn.

Businesses now want to ensure business stability and lay the ground for future growth. Forty-seven percent of those surveyed said that broadening their customer base will help them achieve these goals.

Having access to cost-effective capital (36 percent) and providing more flexible working conditions for staff (31 percent) were also cited as reasons to contribute towards achieving growth and stability for businesses.

 

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