GBA Business Confidence Index: Q2 Results and H2 Outlook
The Greater Bay Area Business Confidence Index (GBAI), jointly run by HKTDC and Standard Chartered Bank, surveys over 1,000 companies in the Guangdong‑Hong Kong‑Macau Greater Bay Area (GBA) each quarter to gauge business sentiment and sector outlooks. The GBAI is a trusted guide for buyers and suppliers tracking regional trends for 2025.
Key Survey Takeaways
1. Current Performance Stable, but Future Uncertain
- The Greater Bay Area Business Confidence Index (GBAI) stayed stable in Q2 (53.1), supported by companies rushing orders and production ahead of expected tariff changes.
- However, the outlook for the second half of the year (H2) is less optimistic: with the expectations index dropping to a 10-quarter low (52.0), signaling growing caution among businesses.
2. Sector Insights
- Tech & Innovation: This sector remains resilient, with strong sentiment buoyed by Shenzhen’s tech firms.
- Manufacturing & Trading: Showed short-term strength thanks to front-loaded orders.
- Retail & Wholesale: Continues to lag, especially in Hong Kong, despite government efforts to boost consumer spending.
- Hong Kong vs. Shenzhen: Hong Kong’s domestic consumption is struggling, while Shenzhen benefits from robust tech activity.
3. Tariff Impact
- Over 75% of GBA companies report negative impacts from US tariff hikes, with 41% specifically citing delays in business plan implementation due to tariff policy uncertainty. Other major impacts include logistical disruptions (35%) and loss of business to lower-tariff markets (30%).
4. Financial Conditions
- Credit conditions are mixed, but recent monetary easing in China has helped lower bank financing costs, potentially offering more favorable terms for global buyers.
Insights for Global Buyers & Suppliers
- Prepare for Uncertainty: With business sentiment softening and tariffs on the horizon, anticipate possible delays, price adjustments, or supply disruptions in the GBA region.
- Tariff Strategies: Both buyers and suppliers should develop contingency plans for further tariff actions, such as diversifying supply chains or adjusting timelines.
- Financing: Easing credit in China may help some suppliers manage costs, potentially offering more favorable terms for global buyers.
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While the Greater Bay Area is maintaining momentum for now, global buyers and suppliers should keep a close eye on tariff developments and sector-specific performance — especially as expectations for the second half of the year become more cautious. Flexibility and proactive risk management will be crucial for success in this evolving environment.
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