Business confidence across the Greater Bay Area (GBA) remained broadly stable in the fourth quarter of 2025 despite persistent external uncertainties, according to the latest Standard Chartered–HKTDC GBA Business Confidence Index (GBAI).
The GBA — an 11-city cluster spanning Hong Kong, Macao and nine Guangdong cities — represents a US$1.9 trillion economy with a population of nearly 90 million. The region plays a central role in China's ,anufacturing, innovation and cross border finance, oftened likened to San Francisco Bay Area or New York metropolitan region.
The modest quarter‑on‑quarter pullback reflects waning benefits from earlier front‑loading and more cautious investment decisions, while more than half of surveyed companies are now eyeing business opportunities in the Middle East.
The report said "current performance" index for business activity in Q4 retreated to 50.3 from 54.7 in the previous quarter, while the "expectations" index dropped to 51 from 55.7. Despite the drop, both indices remained in expansionary territory, a clear indication that GBA businesses still maintained a broadly positive outlook.
Turning to the sub-indices, something of a mixed picture in terms of both "current performance" and "expectations" was evident for the quarter overall.
More specifically, the sub‑indices for "current performance," "new orders," "fixed asset investment" and "profit" all slipped below the 50‑point threshold. The decline is viewed largely as a correction following the end of earlier front‑loading activity. Softer loan growth and slower fixed‑asset investment on the Chinese Mainland also contributed to the slight downward trend.
On the contrary, it noted that the "expectations" remained relatively positive, with sub-indices for "production/sales", "new orders" and "profits" all staying in expansionary territory in the fourth quarter last year.
"Taken together, these upbeat outcomes can be seen as indicating the strong likelihood of robust demand persisting through the first quarter of 2026 and beyond," the report said.
Hong Kong outperforms region
In terms of individual GBA city evaluations, the readings for Hong Kong were well above the survey average.
The GBAI noted that this confirmed that the city's economic rebound remained very much on course at year-end, with the "current performance" sub-index up 5.7 points to 57.9 and its "expectations" reading up 1.8 points to 55.4. Overall, this sustained recovery in growth momentum was seen as being driven by the city's "professional services" and "retail/wholesale" sectors.
Wing Chu, deputy director of research, HKTDC, said following the extension of the trade truce between the U.S. and China, business sentiment in Hong Kong continued to improve, allowing the city to outperform its peer cities across the GBA. "This strength stands in contrast to the broader moderation seen in the overall GBA indices amid persistent external uncertainties," he said.
"This recovery momentum in Hong Kong is expected to remain intact, supported by buoyant business activities and solid performance of the professional services sector – one of the key factors that underscore the city’' solid recovery trajectory," Chu further said.
Meanwhile, the deputy director of research, HKTDC, noted that the agency will continue to proactively support GBA enterprises and capitalise on opportunities in emerging markets, including those in the Middle East.
Middle East expansion
In order to get a greater understanding of the wider aspirations of GBA businesses, the survey also examined their interest in the expansion into the Middle East.
"Encouragingly, over half of the respondents (54.8%) had an active interest in expanding into the Middle East, with the UAE (53.9%) and Saudi Arabia (53.2%) selected as the top two priority markets," the report said.
Digging deeper into these findings, of the companies that have already started or are interested in expanding into the Middle East, nearly 60% were engaged in trading/ distribution activity. This was followed by manufacturing (42.7%) and logistics/ storage (28.3%).
Despite the widespread optimism over the emerging opportunities in the Middle East, many GBA businesses were also aware that they faced a number of challenges when it came to ensuring success.
The GBAI said overall, the top three concerns were "lack of understanding of local laws and regulations" (50.4%), "opaque local regulatory environment and restrictions on foreign investment" (43.1%) and "cultural and business differences" (42%).
Hunter Chan, economist, Greater China, Standard Chartered, said with increasingly complex geopolitical risks, global corporates not only actively diversify their supply chains but also explore new markets in recent years, thereby giving rise to numerous emerging trade corridors.
"The thematic survey found that the GBA corporates are interested in entering the Middle East, which aligns with Hong Kong Government's policy focus to set up the 'GoGlobal Task Force' to leverage Hong Kong's advantages as a 'go global' platform, and deepen economic ties with the Middle East."
"The survey also found that almost all respondents indicate that Hong Kong services are needed to help in expansion into the Middle East to address the challenges posed by local regulations and cultural differences," Chan added, noting that Hong Kong can further leverage its unique position as a 'super-connector,' becoming a springboard for enterprises to develop overseas markets.
The GBAI is a forward‑looking quarterly survey of more than 1,000 companies across the Greater Bay Area, covering sectors from manufacturing and trade to finance, professional services and technology. It tracks business sentiment and cross‑city dynamics in the region, helping investors and firms assess current conditions, gauge future prospects and shape their strategies for the GBA.
