Hong Kong Business Morale Slightly Worsens

Business confidence in Hong Kong edged up to -4 in the third quarter of 2026 from -5 in the previous quarter. The share of respondents expecting a better business condition declined to 10% from 11% in Q2 2026, while those anticipating worse conditions eased slightly to 14% from 16%. Confidence strengthened in manufacturing (5 vs 0 in Q2) and sentiment also improved, though remained negative, in accommodation and food services (-9 vs -35), construction (-6 vs -21), and transportation, storage and courier services (-15 vs -24), information and communications (-7 vs -16), and retail (-2 vs -3). Confidence in import/export trade and wholesale was unchanged at -9. However, optimism eased in financing and insurance (10 vs 12), while sentiment deteriorated sharply in real estate (-11 vs 9) and professional and business services (-10 vs 2).

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).