Despite heightened geopolitical tensions and oil price shocks stemming from the Middle East conflict, business confidence across the Greater Bay Area (GBA) remained resilient in the first quarter of 2026, according to the latest Standard Chartered Greater Bay Area Business Confidence Index (GBAI) released jointly by Standard Chartered and the Hong Kong Trade Development Council (HKTDC).
The survey, which captures activity and sentiment since the conflict began in late February, shows that the “current performance” index edged down marginally to 49.9 from 50.3 in the previous quarter, while the “expectation” index moderated to 50.4 from 51. Both indices hovering around the 50-neutral mark indicate that GBA corporates are weathering the storm, supported by Chinese government policies aimed at boosting the domestic economy.
Hong Kong, in particular, is expected to sustain a solid growth pace. The city’s “current” and “expectation” sub-indices both stood at 52.7, comfortably in expansionary territory, buoyed by improvements in the financial services and innovation and technology sectors. “Hong Kong has once again demonstrated its resilience amid market turbulence, and such resilience is expected to attract more global capital into HKD and Renminbi assets as safe-haven allocation,” said Tommy Wu, Senior Economist, Greater China and North Asia, Standard Chartered.
The survey also highlighted the impact of policy support. Among the new measures introduced by China’s Ministry of Finance in January, respondents cited “loan interest subsidies for small, medium and micro-sized enterprises” (38.4%), “large-scale equipment upgrade subsidies” (36.9%), and “consumer goods trade-in subsidies” (31.7%) as the most beneficial. “Demand-boosting stimulus is generating tangible benefits for GBA companies, helping to cushion external challenges amid the Middle East conflict,” said Wing Chu, Deputy Director of Research, HKTDC.
However, challenges remain. Labor costs were identified by 54.9% of respondents as the biggest pressure point, followed by rental costs (41.7%) and market competition (33.3%). For Hong Kong respondents, market competition was a more pressing challenge than rental costs, likely due to increased cross-border travel and changing consumption behaviors. In response, 38.7% of firms plan to prioritize investment in talent recruitment, followed by market promotion (38.1%) and personnel training (36.7%).
The GBAI is a forward-looking quarterly survey of over 1,000 companies across the GBA, covering manufacturing, trading, retail, financial services, professional services, and innovation and technology. The full report is available at the Standard Chartered GBA Business Confidence Index Report, and additional insights can be found on the HKTDC Research page.
