Our GBA Business Confidence Index (GBAI), based on quarterly surveys of over 1,000 companies operating in the GuangdongHong KongMacau Greater Bay Area (GBA) and conducted in collaboration with the Hong Kong Trade Development Council (HKTDC), shows that current business activity is picking up. The current performance index for business activity rose to 54.3 in Q12024 from 51.4 in Q42023, led by strong rallies above the 60 mark (50 being neutral) across the ‘profits’, ‘new orders’ and ‘production/sales’ subindices. This shows that GBA businesses are off to a solid start to 2024; that said, some of the more forwardlooking subindices like ‘raw material inventory’ and ‘financing scale’ remained soft. This, together with the inability of the expectations indices to benefit from better current performance, is a clear sign of stillcautious business sentiment. With the prevailing recovery momentum still looking fragile, we see room for more policy support to continue to narrow the output gap and dispel deflation expectations.

Our survey confirmed that credit conditions are becoming more favourable and the improvement is increasingly broadbased. However, a breakdown by industry shows a mixed picture, with ‘financial services’ and ‘professional services’ not sharing the improved optimism across our manufacturing, retail and technology respondents.

Similarly, performance diverged across core GBA cities, with Guangzhou and Shenzhen outperforming while Hong Kong’s scores worsened. Responses to our thematic questions showed rising business participation in ecommerce, not only in China but increasingly with other Asian buyers. Our existing and future ecommerce users also shared their views on the related opportunities and challenges.

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