Hong Kong, 2 April 2012 – Hong Kong business confidence has slipped back 27 Index points to 111 since September, temporarily halting its growth trajectory, according to the global Regus Business Confidence Index. One reflection of the more cautious outlook being adopted by the local business community is the number of companies reporting revenue growth, which has dropped from 72% six months ago to just 47% now. The number of firms reporting profit growth has also dropped to 40%, a fall of 20% compared to six months ago.
In response to global economic uncertainties, the survey suggests that businesses are looking for new ways to contain costs. Shortening their supply chains, making increased use of IT cloud applications and increasing flexible workspace were all cited by respondents as the most effective ways to cut costs without damaging longer-term growth prospects.
Other notable findings from the survey were:
Hong Kong respondents identified a shorter supply chain (48%), increased use of IT cloud applications (41%) and increased use of flexible workspace (39%) as the best ways to lower their operating costs;
Hong Kong firms said that broadening their customer base (47%), having access to cost-effective capital (36%) and providing more flexible working conditions for staff (31%) would be the most effective ways to ensure business stability and lay the ground for future growth;
Globally, the Index recorded lower levels of business confidence for small businesses (107) than for large firms (124);
When asked to look back at the last few years, Hong Kong companies identified high office rents (53%) and lack of access to capital (53%) as the main reasons for corporate distress during the global economic downturn.
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"Although it was only minimally affected by the significant setbacks experienced in other economies between March and September 2011, Hong Kong business confidence has now recorded a dip, underscored by a smaller number of businesses reporting either revenue or profit growth," said Hans Leijten, Regus' Vice President, East Asia. "In the current climate, I believe they are right to focus on controlling their costs, but it's interesting to note that they are doing so in ways that won't constrain future growth. From harnessing efficient IT solutions through to providing more flexible working conditions for staff, Hong Kong businesses clearly recognize the need to be nimble and scalable. This perhaps implies a greater level of underlying confidence than these results suggest."
Table 1: During the recent economic slowdown, which inflexibilities contributed the most to corporate distress?
|
|
Mainland
China |
HK |
India |
S'pore |
Taiwan |
Global Ave |
|
Paying for unnecessary office space |
43% |
46% |
61% |
54% |
51% |
45% |
|
Property leases |
45% |
53% |
38% |
46% |
32% |
37% |
|
Access to cost effective capital |
56% |
53% |
58% |
47% |
39% |
47% |
Table 2: What initiatives will make the greatest contribution to future business stability?
|
|
Mainland
China |
HK |
India |
S'pore |
Taiwan |
Global Ave |
|
Flexible workspace |
31% |
29% |
32% |
38% |
28% |
32% |
|
More flexible working conditions for staff |
43% |
31% |
35% |
38% |
60% |
37% |
|
More remote working |
22% |
23% |
29% |
21% |
20% |
32% |
|
Wider distribution of customers |
73% |
47% |
40% |
39% |
53% |
45% |
|
Access to cost effective capital |
22% |
36% |
33% |
31% |
23% |
30% |
Table 3: Looking forward, where can companies cut costs without damaging future growth prospects?
|
|
Mainland
China |
HK |
India |
S'pore |
Taiwan |
Global Ave |
|
Shorter supply chain |
47% |
48% |
39% |
43% |
54% |
48% |
|
Reducing fixed workspace |
25% |
39% |
40% |
45% |
34% |
57% |
|
More use of pay-as-you-go business services |
36% |
32% |
49% |
46% |
26% |
22% |
|
More cloud IT applications |
33% |
41% |
36% |
40% |
58% |
30% |
The Regus Business Confidence Index
In every edition, the Regus Business Tracker report presents an updated Business Confidence Index. This index is a measurement formed on an aggregate of positive and forward-looking statements combining year-to-date revenue and profit trends with views on the expected economic upturn in the coming months and aims to provide businesses with a single point of reference of the survey's key findings. Its benchmark average was set at 100 in the first edition of the Regus Business tracker in September 2009.
About Regus
Regus is the world's largest provider of flexible workplaces, with products and services ranging from fully equipped offices to professional meeting rooms, business lounges and the world's largest network of video communication studios. Regus enables people to work their way, whether it's from home, on the road or from an office. Customers such as Google, GlaxoSmithKline, and Nokia join hundreds of thousands of growing small and medium businesses that benefit from outsourcing their office and workplace needs to Regus, allowing them to focus on their core activities.
Over 900,000 customers a day benefit from Regus facilities spread across a global footprint of 1,200 locations in 550 cities and 95 countries, which allow individuals and companies to work wherever, however and whenever they want to. Regus was founded in Brussels, Belgium in 1989, is headquartered in Luxembourg and listed on the London Stock Exchange. For more information please visit: www.regus.com
Press contacts
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Phone: (+852) 2537 8022
Email: adam.barty@ebacomms.com / ivy.chow@ebacomms.com
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