The Greater Bay Area's business activity edged up to a four-year high last quarter, following the extension of the US-China tariffs truce, according to an index by Standard Chartered Bank and the Hong Kong Trade Development Council.
The current performance index for business activity inched up to 54.7 from 53.1 in the second quarter after the tariff shock, according to the GBA Business Confidence Index.
The expectations index also rose to a two-year high of 55.7 in the third quarter, suggesting a broad-based recovery in business confidence, the finding showed.
Of the eight sub-indices, six saw a rise in the quarter, with two sub-indices – new orders and prices of finished goods/services – showing sharp rebounds.
The survey, which polled over 1,000 GBA companies between early August and early September, attributed the recoveries to a pause in China-US reciprocal tariffs that bolstered manufacturing and trading activity, and an increase in financial services activity due to the buoyant equity market.
Most GBA cities saw a rebound in both the current and expectations indices, with Hong Kong witnessing a substantial recovery, benefiting from the continued front-loading trade activity and a pick-up in financial activity, thanks to a strong initial public offering performance and the stock market rally, the report said.
The survey also found that while nearly two-thirds of respondents revealed they have not been impacted by “involution”, or excessive domestic competition, most expressed increased caution towards expanding their domestic business.
To address the challenges, companies have adopted a variety of strategies, including enhancing product quality, strengthening brand building, and improving cost control, according to the report.
