Hong Kong General Chamber finds 61pc of respondents upbeat on 2013

Sixty-one per cent of respondents to an Hong Kong General Chamber of Commerce (HKGCC) survey on business confidence collectively estimated a two to four per cent GDP growth for the territory in the coming year.

The results are similar to the chamber's own forecast of two to three per cent for real GDP growth in 2013, up slightly from 2012's expected one per cent expansion. The main inflation indicator, the Composite Consumer Price Index, is expected to rise three to four per cent, slightly lower than an anticipated four per cent in 2012.

"In each of our annual surveys, members tell us that Hong Kong remains a great place to do business," said chamber CEO Shirley Yuen. "At the same time, they recognise that we face stiff competition and challenges to the sustainability of our economy, business and governance."

Respondents cite the overall business environment, including costs and environmental factors as high on the list of challenges for the coming year. Ms Shirley said although many believe Hong Kong's overall competitiveness is stable at 54.3 per cent, the cost of doing business is the number one challenge that they face. Human resource skills, pollution and the lack of long-term planning also feature on the list of challenges to Hong Kong's competitiveness.

According to the chamber's chief economist David O'Rear the global economy remains "extremely sluggish" this year with scattered and mild improvements forecast into 2013. "Even without the twin disasters of a break-up of the Euro Area and the United States Congress imposing unwarranted fiscal tightening, demand in the world's major markets will be poor.

"Hong Kong's service-oriented economy is primarily driven by foreign commerce, with two-way trade some four and half times as large as domestic demand so its members key concerns are costs to the environment and slowing external demand," Mr O'Rear said.

"It continues to attract business due to its geographic location, physical infrastructure, free flow of information, tax regime, and legal and regulatory environment," he said.

Air quality and weak government policy in replacement of older buses and trucks is highly favoured by respondents at 88 per cent and greater building energy efficiency at 88 per cent, said the chamber press release.

HKGCC members are largely made up of services sector companies, of which includes traders, at 24.7 per cent, followed by the finance sector at 12.7 per cent, professional services (15.1 per cent), property and construction (8.1 per cent), transportation and logistics (7.5 per cent). Manufacturing firms and others make up the remaining 11.6 per cent.