Following a rebound in the previous quarter, the GBAI indices showed a moderate quarter-on-quarter retreat in the fourth quarter of 2025. This has been seen as the diminishing returns from front-loading activities as well as from a more cautious investment, financing and capacity utilisation amid ongoing external uncertainties.

The “current performance” index for business activity in Q4 retreated to 50.3 from 54.7 in the previous quarter, while the “expectations” index dropped to 51 from 55.7. Despite the drop, both indices remained in expansionary territory, a clear indication that GBA businesses still maintained a broadly positive outlook.

Turning to the sub-indices, something of a mixed picture in terms of both “current performance” and “expectations” was evident for the quarter overall. More specifically, with regard to “current performance”, the “new orders”, “fixed asset investment” and “profit” sub-indices all fell below the 50 watershed level. This, however, was seen as a correction following the end of the front-loading process that had occurred in earlier quarters. Subdued growth in loans and fixed asset investment in the Chinese Mainland also added to this slight downward tendency.

On the contrary, the “expectations” remained relatively positive, with sub-indices for “production/sales”, “new orders” and “profits” all staying in expansionary territory in the fourth quarter last year. Taken together, these upbeat outcomes can be seen as indicating the strong likelihood of robust demand persisting through the first quarter of 2026 and beyond.

In terms of individual GBA city evaluations, the readings for Hong Kong were well above the survey average. This confirmed that the city’s economic rebound remained very much on course at year-end, with the “current performance” sub-index up 5.7 points to 57.9 and its “expectations” reading up 1.8 points to 55.4. Overall, this sustained recovery in growth momentum was seen as being driven by the city’s “professional services” and “retail/wholesale” sectors.

Wing Chu, Deputy Director of Research, HKTDC, said: “Following the extension of the trade truce between the US and China, business sentiment in Hong Kong continued to improve, allowing the city to outperform its peer cities across the GBA. This strength stands in contrast to the broader moderation seen in the overall GBA indices amid persistent external uncertainties. This recovery momentum in Hong Kong is expected to remain intact, supported by buoyant business activities and solid performance of the professional services sector – one of the key factors that underscore the city’s solid recovery trajectory. The HKTDC will continue to proactively support GBA enterprises in leveraging Hong Kong's professional services to ‘go global’ and capitalise on opportunities in emerging markets, including those in the Middle East.”

In order to get a greater understanding of the wider aspirations of GBA businesses, the survey also examined their interest in the expansion into the Middle East. Encouragingly, over half of the respondents (54.8%) had an active interest in expanding into the Middle East, with the UAE (53.9%) and Saudi Arabia (53.2%) selected as the top two priority markets.

Digging deeper into these findings, of the companies that have already started or are interested in expanding into the Middle East, nearly 60% were engaged in trading/ distribution activity. This was followed by manufacturing (42.7%) and logistics/ storage (28.3%).

Despite the widespread optimism over the emerging opportunities in the Middle East, many GBA businesses were also aware that they faced a number of challenges when it came to ensuring success. Overall, the top three concerns here were: “lack of understanding of local laws and regulations” (50.4%), “opaque local regulatory environment and restrictions on foreign investment” (43.1%) and “cultural and business differences” (42%).

Crucially, in order to help manage such challenges, some 99.2% of respondents saw Hong Kong’s world-class services as set to play pivotal roles in ensuring the success of their Middle East expansion plans. Particular emphasis was placed on the decisive contribution of the city’s professional services sector, especially when it came to successfully navigating local regulatory and compliance requirements.

Hunter Chan, Economist, Greater China, Standard Chartered, said: “With increasingly complex geopolitical risks, global corporates not only actively diversify their supply chains but also explore new markets in recent years, thereby giving rise to numerous emerging trade corridors. The thematic survey found that the GBA corporates are interested in entering the Middle East, which aligns with Hong Kong Government’s policy focus to set up the ‘GoGlobal Task Force’ to leverage Hong Kong’s advantages as a ‘go global’ platform, and deepen economic ties with the Middle East. The survey also found that almost all respondents indicate that Hong Kong services are needed to help in expansion into the Middle East to address the challenges posed by local regulations and cultural differences. With its advantage in professional services, Hong Kong can further leverage its unique position as a ‘super-connector’, becoming a springboard for enterprises to develop overseas markets.”

About the GBAI

The GBAI is the first forward-looking quarterly survey in the market that looks at the business sentiment and synergistic effects in cities and industries across the GBA. It is compiled based on a survey of more than 1,000 companies in the GBA covering the manufacturing and trading, retail and wholesale, financial services, professional services and innovation and technology sectors. The index enables investors and businesses to better understand the current business climate, gauge future performance prospects and formulate their market strategies for the GBA.

Related materials

Standard Chartered GBA Business Confidence Index Report:
https://www.sc.com/hk/gba/gba-index-report/

HKTDC Research: https://research.hktdc.com/en/article/MjIzMTk3MzQwOA

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About HKTDC

The Hong Kong Trade Development Council (HKTDC) is a statutory body established in 1966 to promote, assist and develop Hong Kong's trade. With over 50 offices globally, including 13 in Mainland China, the HKTDC promotes Hong Kong as a two-way global investment and business hub. The HKTDC organises international exhibitions, conferences and business missions to create business opportunities for companies, particularly small and medium-sized enterprises (SMEs), in the mainland and international markets. The HKTDC also provides up-to-date market insights and product information via research reports and digital news channels. For more information, please visit:www.hktdc.com/aboutus.