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Business expectations for the second quarter of 2022
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     The Census and Statistics Department (C&SD) released today (April 22) the results of the Quarterly Business Tendency Survey for the second quarter (Q2) of 2022.
 
Business situation
 
     For all surveyed sectors taken together, the proportion of respondents expecting their business situation to be worse (21%) in Q2 2022 over the preceding quarter is higher than that expecting it to be better (13%). 
 
     When compared with the results of the Q1 2022 survey round, the proportion of respondents expecting a worse business situation in Q2 2022 is 21%, higher than the corresponding proportion of 13% in Q1 2022. On the other hand, the proportion of respondents expecting a better business situation has slightly decreased from 14% in Q1 2022 to 13% in Q2 2022.
 
     Analysed by sector, significantly more respondents in the construction sector expect their business situation to be worse in Q2 2022 as compared with Q1 2022, relative to those expecting a better business situation. In the accommodation and food services sector and retail sector, however, more respondents expect their business situation to be better, as compared to those expecting a worse business situation. 
 
     The results of the survey should be interpreted with care. In this type of survey on expectations, the views collected in the survey are affected by the events in the community occurring around the time of enumeration, and it is difficult to establish precisely the extent to which respondents' perception of the future accords with the underlying trends. The enumeration period for this survey round was from March 2, 2022 to April 12, 2022. 
 
Volume of business/output
 
     Respondents in quite a number of the surveyed sectors expect their volume of business/output to decrease on balance or remain broadly unchanged in Q2 2022 as compared with Q1 2022. In particular, more respondents in the construction; professional and business services; and manufacturing sectors expect their volume of business to decrease in Q2 2022 over Q1 2022. In the accommodation and food services sector, however, significantly more respondents expect their volume of business to increase in Q2 2022 over Q1 2022.    
 
Employment
 
     Respondents in most of the surveyed sectors expect their employment to remain broadly unchanged in Q2 2022 as compared with Q1 2022. 
 
Selling price/service charge
 
     Respondents in most of the surveyed sectors expect their selling prices/service charges to remain broadly unchanged in Q2 2022 as compared with Q1 2022. In manufacturing sector, however, more respondents expect their selling prices to go up, as compared to those expecting their selling prices to go down.
 
Commentary
 
     A Government spokesman said that business sentiment among large enterprises turned more cautious as compared to three months ago amid the fifth wave of local epidemic and deteriorating external environment, while hiring sentiment remained largely stable. However, it should be noted that the latest survey results have not fully reflected the gradual improvement in business following the recent moderation of local epidemic situation.
 
     The spokesman pointed out that heightened geopolitical tensions, elevated global inflation and monetary tightening by major central banks will dampen global economic growth. Nonetheless, the easing local epidemic situation and resultant relaxation of social distancing measures, along with the various support measures rolled out by the Government should help support business sentiment in the near term. It is vital for the community to work in unison with the Government to put the local epidemic under control as early as possible. The Government will continue to monitor the situation closely.
 
Further information
 
     The survey gathers views on short-term business performance from the senior management of about 560 prominent establishments in various sectors in Hong Kong with a view to providing a quick reference, with minimum time lag, for predicting the short-term future economic performance of the local economy.
 
     The survey covers 10 major sectors in Hong Kong, namely manufacturing; construction; import/export trade and wholesale; retail; accommodation and food services (mainly covering services rendered by hotels and restaurants); transportation, storage and courier services; information and communications; financing and insurance; real estate; and professional and business services sectors.
 
     Views collected in the survey refer only to those of respondents on their own establishments rather than those on the respective sectors they are engaged in, and are limited to the expected direction of quarter-to-quarter change (e.g. "up", "same" or "down") but not the magnitude of change. In collecting views on the quarter-to-quarter changes, if the variable in question is subject to seasonal variations, respondents are asked to provide the expected changes after excluding the normal seasonal variations.
 
     Survey results are generally presented as "net balance", i.e. the difference between the percentage of respondents choosing "up" and that choosing "down". The percentage distribution of respondents among various response categories (e.g. "up", "same" and "down") reflects how varied their business expectations are. The "net balance", with its appropriate sign, indicates the direction of expected change in the variable concerned. A positive sign indicates a likely upward trend while a negative sign indicates a likely downward trend.  However, the magnitude of the "net balance" reflects only the prevalence of optimism or pessimism, but not the magnitude of expected change, since information relating to such magnitude is not collected in the survey.
 
     Furthermore, owing to sample size constraint, care should be taken in interpreting survey results involving a small percentage (e.g. less than 10%) of respondents in individual sectors.
 
     Chart 1 shows the views on expected changes in business situation for the period Q2 2021 to Q2 2022.

     Table 1 shows the net balances of views on expectations in respect of different variables for Q2 2022.
 
     The survey results are published in greater detail in the "Report on Quarterly Business Tendency Survey, Q2 2022". Users can download the publication at the website of the C&SD (www.censtatd.gov.hk/en/EIndexbySubject.html?pcode=B1110008&scode=300).
       
     Users who have enquiries about the survey results may contact the Business Expectation Statistics Section of the C&SD (Tel: 3903 7263; email: business-prospects@censtatd.gov.hk).
 
Ends/Friday, April 22, 2022
Issued at HKT 16:30
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