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The business situation in the first quarter (Q1) of 2009 is generally expected to be worse than that in Q4 2008, according to results of the Quarterly Business Tendency Survey for Q1 2009 released by the Census and Statistics Department (C&SD) today (January 23).
Business Situation
For all surveyed sectors taken together, 59% of respondents expect their business situation to be worse, as compared to 6% of respondents expecting it to be better, in Q1 2009 over Q4 2008. Most respondents who expect their business situation to be worse when compared to the previous quarter indicate that the financial tsunami will have impact on their business.
Analysed by sector, the accommodation and food services sector (mainly referring to the hotels and restaurants industries) stands out to have the most unfavourable business outlook. Close to 80% of respondents in this sector expect their business to deteriorate in Q1 2009. This is followed by the construction, and import/export trade and wholesale sectors; each with some 70% of respondents expecting their business to get worse.
On the other hand, respondents in the real estate sector are relatively more optimistic. 15% of them expect their business situation in Q1 2009 to be better and some 70% expect their business situation to remain unchanged when compared with Q4 2008. Within the sector, respondents engaged in real estate maintenance management services generally have a more optimistic outlook than their counterparts (e.g. those in real estate development and leasing, brokerage and agency) in the sector.
A spokesman of the C&SD cautioned that the results of the survey should be interpreted with care. "In this type of survey on expectations, the views collected in the survey are affected by the events in the community occurring around the time of enumeration, and it is difficult to establish precisely the extent to which respondents' perception of the future accords with the underlying trends." The enumeration period for this survey round was from December 9, 2008 to January 13, 2009.
Volume of Business/Output
Consistent with expectations on the overall business situation, significantly more respondents in most surveyed sectors expect their volume of business/output to decrease, as against those expecting it to increase, in Q1 2009 over Q4 2008.
Employment
Despite that the overall business situation in Q1 2009 looks unfavourable, expectations on employment level are generally less gloomy. As compared to the expectations on business situation, relatively more respondents expect their number of persons engaged to remain stable.
Respondents in the real estate sector appear to be more optimistic on employment level. More respondents expect their number of persons engaged to increase, as compared to those expecting it to decrease, in Q1 2009. Similar to the expectations on the overall business situation, positive outlook on employment level prevails amongst respondents engaged in real estate maintenance management services (while most respondents engaged in real estate development and leasing, and brokerage and agency expect a stable employment).
On the other hand, significantly more respondents in the construction, financing and insurance, import/export trade and wholesale, and manufacturing sectors expect their number of persons engaged to decrease, as compared to those expecting it to increase, in Q1 2009 over Q4 2008.
Selling Price/Service Charge
In most sectors, significantly more respondents expect their selling price/service charge to go down, as compared to those expecting it to go up.
Commentary
A Government spokesman comments that business situations across a wide range of sectors have worsened markedly over the recent past, due to the widespread impact of the global financial tsunami on the Hong Kong economy. Business situation in 2009 will be very challenging, amid a deepening global economic downturn. The prospects of a turnaround will depend much on how the financial crisis will play out and when the global economic environment will improve.
Further Information
The survey gathers views on short-term business performance from the senior management of about 560 prominent establishments in various sectors in Hong Kong with a view to providing a quick reference, with minimum time lag, for predicting the short-term future economic performance of the local economy.
As from the Q1 2009 survey, the Hong Kong Standard Industrial Classification Version 2.0 (HSIC V2.0) has been adopted for classifying the economic activities undertaken by surveyed establishments, based on which the industry sectors to which the establishments belong are determined. The survey covers ten major sectors in Hong Kong, including the manufacturing; construction; import/export trade and wholesale; retail; accommodation and food services; transportation, storage and courier services; information and communications; financing and insurance; real estate; and professional and business services sectors.
Views collected in the survey refer only to those of respondents on their own establishments rather than those on the respective sectors they are engaged in; and are limited to the expected direction of quarter-to-quarter change (e.g. "up", "same" or "down") but not the magnitude of change. In collecting views on the quarter-to-quarter changes, if the variable in question may be subject to seasonal variations, respondents are asked to provide the expected changes after excluding the normal seasonal variations.
Survey results are generally presented as "net balance", i.e. the difference between the percentages of respondents choosing "up" over that choosing "down". The percentage distribution of respondents among various response categories (e.g. "up", "same" and "down") reflects how varied their business expectations are. The "net balance", with its appropriate sign, indicates the direction of expected change in the variable concerned. A positive sign indicates a likely upward trend while a negative sign, a likely downward trend. However, the magnitude of the "net balance" reflects only the prevalence of optimism or pessimism, but not the magnitude of expected change, since information relating to such magnitude is not collected in the survey.
Furthermore, owing to sample size constraint, care should be taken in interpreting survey results involving a small percentage (e.g. less than 10%) of respondents in individual sectors.
Table 1 shows the net balances on views on expectations in respect of different variables.
The survey results are published in greater detail in the "Report on Quarterly Business Tendency Survey, Q1 2009". The publication is now available for download (in PDF format) free of charge at the website of the Census and Statistics Department (www.censtatd.gov.hk/products_and_services/products/publications/index.jsp).
The print version of the publication can be purchased in the following ways:
* Purchase in person at the Publications Unit of the C&SD (Address: 19/F, Wanchai Tower, 12 Harbour Road, Wan Chai; Tel.: 2582 3025). The publication is for sale at HK$13 per copy.
* Complete a mail order form which is available for downloading from the website of C&SD (www.censtatd.gov.hk/products_and_services/other_services/provision_of_stat /mail_ordering_of_publications/index.jsp) and return it to C&SD. The price (excluding postage) is the same as above.
* Purchase online at the Government Bookstore of the Information Services Department (www.bookstore.gov.hk).
Enquiries about the survey results may be directed to the Business Expectation Statistics Section of the C&SD (Tel.: 2805 6112).
Ends/Friday, January 23, 2009
Issued at HKT 16:31
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