In the first quarter, the Greater Bay Area (GBA) witnessed a significant rise in its business activity performance index, climbing to 53.5 from 50.7 in the previous quarter, marking the highest level since the second quarter of 2024. Reported by Standard Chartered, this upward trend reflects broad-based gains across various sectors. Among the eight components of the index, six showed quarterly improvements, with all previously underperforming elements surpassing the neutral mark. Notable increases were observed in capacity utilization, raw material inventory, financing scale, and profits. Furthermore, the expectations index also improved, indicating positive outlooks for future business activities.

Detailed Insights into GBA's Economic Resurgence

In the vibrant economic landscape of the Greater Bay Area during the early months of the year, businesses experienced a remarkable surge in activity. This momentum was driven by widespread improvements across key metrics such as capacity utilization, which saw an increase of 3.2 points, alongside substantial jumps in raw material inventory and financing scale. In addition, profit margins improved by 3.1 points, underscoring the robust health of enterprises within the region. These figures were part of a comprehensive survey involving over a thousand companies conducted between February and March.

Looking ahead, many firms expressed optimism about the impact of recent policy initiatives aimed at boosting consumption. Approximately 41% of surveyed companies anticipated positive effects from these measures, while 38% believed that trade-in programs for consumer goods would benefit their operations. Moreover, there is consensus among businesses regarding the need for further market access relaxation for both domestic private entities and foreign investors to stimulate service-oriented consumption.

From a regional perspective, most city-specific indices demonstrated growth except for Shenzhen. The expectation sub-indices also highlighted a favorable outlook, particularly concerning profits and raw material inventories.

Senior economist Kelvin Lau emphasized the potential for monetary adjustments in April, citing the necessity to stabilize market sentiment following recent tariff-induced challenges. He anticipates ongoing support from both fiscal and monetary policies on the mainland, coupled with enhanced short-term assistance for small and medium-sized enterprises in Hong Kong.

As the GBA continues to thrive, it underscores the resilience and adaptability of its economic ecosystem amidst global uncertainties.

This analysis reveals the dynamic interplay of policy interventions and market forces shaping the trajectory of businesses within the GBA. It highlights the importance of strategic planning and collaboration between governments and enterprises to sustain growth and foster innovation. The findings underscore the region's pivotal role in driving economic progress not only locally but also on a broader scale.