Photo shows a view by the Victoria Harbor in Hong Kong, south China, on June 11, 2020. (LI GANG / XINHUA)

Hong Kong’s overall business sentiment improved slightly compared with last quarter, thanks to the removal of most local social-distancing rules and the reopening of the boundary with the Chinese mainland, according to a survey released by the Census and Statistics Department on Friday. 

For all surveyed sectors taken together, 19 percent of respondents expect their business situation to be better in the first quarter of this year, up 3 percentage points on the 16 percent reported last quarter.

A government spokesman attributed the upbeat business sentiment mainly to the relaxation of most anti-pandemic measures and the progressive resumption of quarantine-free travel between the HKSAR and the Chinese mainland

The proportion of respondents expecting a worse business situation nevertheless has also marginally risen by 1 percentage point quarter-on-quarter to 13 percent this time, data from the survey showed.

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The quarterly business tendency survey is conducted by the Hong Kong Special Administrative Region government to gauge short-term business performance, with feedback from the senior management of about 570 prominent establishments in various sectors in Hong Kong.

A government spokesman attributed the upbeat business sentiment mainly to the relaxation of most anti-pandemic measures and the progressive resumption of quarantine-free travel between the HKSAR and the Chinese mainland.

But he also cautioned that tightened financial conditions and the deteriorating global economic outlook will continue to bring uncertainties to the city.

Analyzed by sector, the number of the surveyed sectors with respondents that have an optimistic outlook remains the same as the number of pessimists. Nevertheless, there are significantly more respondents from the accommodation and food services, financing and insurance, and manufacturing sectors who expect a business turnaround at the outset of the year.

The survey also shows that senior managers expect their need for hiring to remain broadly unchanged or to increase on balance in the first quarter as compared with three months ago. In particular, more respondents in the accommodation and food services sector and the construction sector anticipate hiring more employees in the months to come.

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Annie Cheung Man-ching, senior economist at the Bank of China (Hong Kong), said Hong Kong’s consumption and tourism-related industries are expected to benefit the most from the city’s economic pickup following the resumption of normal travel between the Chinese mainland and the special administrative region.

“In addition to spurring people’s spending, the reopening of the border with the Chinese mainland will also boost capital flows that can further buttress the overall business climate,” she said.

However, externally-oriented industries may continue to reel from a vast array of headwinds, such as major central banks’ monetary tightening and global recession, Cheung added.