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| Chamber in Review 活 動 重 溫 |Hong Kong’s business community views 2012 withconcern, according to the Chamber’s latest BusinessProspects Survey. The overwhelming majority(63.9%) believe the economy will grow between 2-4% in thecoming year. A further 17.9% believe growth will be below2%, while the remainder expected better-than a 4% rise inreal GDP.A majority of respondents (51.8%) expect consumer pricesto rise 4-6% in 2012, with slightly more (26.2%) expectinglower inflation, rather than higher (21.6%). [1]The results from the Chamber’s annual Business ProspectsSurvey, conducted in October and November, were based on313 surveys returned, a 11.1% response rate. Respondentsidentified escalating real estate and labour costs as high ontheir list of challenges for the coming year. Although manybelieve Hong Kong’s overall competitiveness is stable (45.7%),the cost of doing business is the number one threat that theyface. Human resource skills, pollution and the lack of longtermplanning also featured on the list of challenges to competitiveness.“Hong Kong’s domestic and external economies are movingin different directions at the moment, but rising costs aretop-of-the-mind in both sectors,” said Chamber Chief EconomistDavid O’Rear.More than two-thirds of respondents (71.6%) expect toraise wages in 2012, up from 63.2% reporting pay hikes in2011. Both answers specifically excluded staff paid accordingto the Statutory Minimum Wage Law enacted in May. Thelargest share of respondents (38.3%) expect to pay staff upto 5% more in 2012 than in 2011. Those increasing pay by5-10% (27.5%) closely mirrored companies expecting to holdpay steady (26.8%).Hong Kong’s strengths remain much the same as in yearspast, with geographic location, physical infrastructure, the freeflow of information, the tax regime and the legal and regulatoryenvironment all continuing to score exceptionally high marks.Dissatisfaction with air quality remains high among Chambersurvey respondents, and for many years has been the weakestarea of government policy by far. Effective responses suchas replacing older buses and trucks with less polluting ones(85.6% favour), greater building energy efficiency (83.1%)and phasing out energy inefficient products (78.9%) werehighlighted, but little has been done.Chamber members responding to the survey reflect themake-up of the Hong Kong economy. Services sector companies,including traders (23.1%), the finance sector (18.4%),professional services (17%), property and construction(9.9%), transportation and logistics (8.8%) among others,comprise 84% of respondents. Manufacturing firms (9.9%)and others make up the rest.Over 46% of respondents have fewer than 100 employees,and more than 52% have been in business in Hong Kong formore than 20 years.Business ProspectsSurvey[1]Where members declined to answer questions, or multiple answerswere permitted, totals may not equal 100.0%18 January 2012 The Bulletin 工 商 月 刊