In this April 10, 2023 photo, Chinese mainland tourists walk along a promenade in Hong Kong. (PHOTO / AP)

HONG KONG – Business of many services industries in Hong Kong improved in the first quarter of this year, thanks to the strong recovery of inbound tourism and domestic demand.

A weak external environment however continued to weigh on the business performance of those service industries that are related to external trade, according to data release by the Census and Statistics Department (C&SD) on Friday.

Comparing Q1 data year-on-year, double-digit increases were recorded in business receipts of the accommodation services (+84.5 percent), food services (+81.7 percent), banking (+30.6 percent), retail (+24.1 percent), and administrative and support services (+21.9 percent) industries.

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On the other hand, double-digit decreases were recorded in business receipts of the transportation (-18.7 percent), import/export trade (-17.5 percent) and courier (-12.5 percent) industries during the same period, the data showed.

Overall business sentiment among small and medium-sized enterprises, meanwhile, softened slightly in May

Analyzed by service domain, business receipts of the tourism, convention and exhibition services domain increased by 400.6 percent year-on-year during the same period, whereas those of the computer and information technology services domain decreased by 9.9 percent year-on-year.

On a seasonally adjusted quarter-to-quarter comparison, business receipts of most service industries increased in the first quarter of 2023.

In particular, double-digit increases were recorded in business receipts of the accommodation services (+53.4 percent) and retail (+12.0 percent) industries. On the other hand, a double-digit decrease was recorded in business receipts of the courier (-10.6 percent) industry during the same period.

“Looking ahead, the recovery of inbound tourism and domestic demand will continue to benefit the domestically-oriented service industries,” reads a government statement, adding that the disbursement of consumption vouchers and "Happy Hong Kong" events will provide additional support to the consumption-related industries.

SME performances

Overall business sentiment among small and medium-sized enterprises (SMEs), meanwhile, softened slightly in May, the C&SD said in a separate statement on Friday.

Expectations on the business situation in one month's time also retreated somewhat. Nonetheless, the overall employment situation remained broadly stable, said a spokesman.

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The current diffusion index on business receipts amongst SMEs decreased from 48.0 in April in the contractionary zone to 47.2 in May, whereas the June outlook diffusion index on business receipts was 49.2.

Analyzed by sector, the current indices on business receipts for many surveyed sectors dropped by varying degrees in May as compared with the previous month, particularly for the business services and retail trade.