Hong Kong Business Morale Improves in Q4

Business confidence in Hong Kong fell to -5 in Q2 2026 from -3 in the previous period, marking the weakest reading in three quarters. The share of respondents expecting a better business condition was unchanged at 11% from Q1 2026, while those expecting a worse outcome rose to 16% from 14%. Deterioration was most evident in accommodation and food services (-35), where significantly more respondents expected a weaker business situation, lower output, and reduced employment. Construction also remained subdued (-21), with expectations skewed toward weaker activity and notably lower selling prices. In contrast, financing and insurance (+12) saw more respondents expecting an improved business situation and higher output. Selling price expectations were broadly stable to higher across most sectors, particularly in import/export trade and wholesale, where more firms expected increases, while construction stood out with significantly more respondents expecting lower tender prices.

Business confidence in Hong Kong slightly worsened to -3 in the first quarter of 2026, from -2 in the previous three-month period. The share of respondents expecting better business conditions declined to 11% from 13% in Q4 2025, while those anticipating worse conditions eased slightly to 14% from 15%. Sentiment continued to deteriorate in import/export trade and wholesale (-12 vs -11 in Q4), transportation, storage and courier services (-13 vs -11), and professional and business services (-12 vs -9). In addition, sentiment turned pessimistic in retail (-1 vs 14), accommodation and food services (-22 vs 10), and real estate (-4 vs 7). On the other hand, sentiment was unchanged in manufacturing (-15), while it improved modestly in construction (-23 vs -24) and information and communication (-8 vs -16).

Business confidence in Hong Kong rose to -2 in the fourth quarter of 2025 from -8 in the previous quarter. The share of respondents expecting business conditions to improve rose to 13% in Q4 2025 (vs 10% in Q3), while those anticipating worse conditions declined to 15% (vs 18% in Q3). Confidence strengthened in financing and insurance (13 vs 11), real estate (7 vs 3), and turned positive in accommodation and food services (10 vs -16) and retail (14 vs -14). Sentiment also improved though remained negative in import/export trade and wholesale (-11 vs -18), transportation, storage and courier services (-11 vs -31), and professional and business services (-9 vs -14). In contrast, sentiment weakened further in manufacturing (-15 vs -2), information and communications (-16 vs -9), and construction (-24 vs -22), reflecting continued sector-specific challenges.