Business sentiment among companies in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) remained broadly stable in the first quarter of 2026, despite ongoing geopolitical and trade headwinds, notably oil price shocks and continued repercussions from the Middle East conflict.

This is according to the latest Standard Chartered GBA Business Confidence Index, a forward-looking quarterly survey conducted by the Hong Kong Trade Development Council (HKTDC) and Standard Chartered that assesses business sentiment across cities and industries in the GBA. The survey canvasses 1,000 companies on their overall operations, business environment and expansion plans, covering sectors such as manufacturing & trading, retail & wholesale, financial services, professional services and innovation & technology. The survey was conducted in February and March, a period marked by escalating tension in the Middle East.

The “current performance” index for business activity in Q1 declined from 50.3 in the previous quarter to 49.9, while the “expectation” index fell from 51 to 50.4. Nevertheless, the indicator remained above the neutral mark of 50, indicating overall positive sentiment.

Concerns over raw material costs, fixed asset investment and financing conditions weighed negatively on views about current performance, while profits, prices and sales were looked on favourably.

The “expectations” index remained modestly positive, despite external uncertainties. The “new orders” sub-index held steady at 51.5, while “prices of finished good/ services” rose to 58.5. However, the “profits” sub-index fell below the 50-threshold level, suggesting that companies do not expect price increases to fully offset a likely rise in energy and material costs.

Standard Chartered Senior Economist Greater China and North Asia Tommy Wu said: “With the prolonged Middle East conflict, we anticipate global energy prices to be higher for longer and the second-round effects to become more visible in the coming months. These will likely weigh on business sentiment and appetite on making fixed investment.”

Looking across individual cities, Hong Kong’s “current” and “expectation” sub-indices edged down to 52.7 but remained comfortably in expansionary territory. Sentiment was supported by improvements in the financial services and innovation and technology sectors.

The survey also investigated the impact of supportive policies introduced by the Chinese government to stimulate domestic demand. Among the new policy measures rolled out by the Ministry of Finance in January, respondents cited loan interest subsidies for small, medium and micro-sized enterprises (38.4%), large-scale equipment upgrade subsidies (36.9%) and consumer goods trade-in subsidies (31.7%) as the policies likely to have a positive impact on their business.

HKTDC Deputy Director of Research Wing Chu said: “Overall, policy‑led support continues to serve as a meaningful tailwind for GBA businesses. While cost pressures and market competition remain key concerns, respondents are considering stepping up investment in talent and market promotion to sustain further business growth.”