59% of Hong Kong CFOs anticipate a 'flat' economic outlook next year

Rising costs amongst key threats.

Senior finance executives from mid-sized enterprises in Hong Kong have expressed a prudent outlook for 2014 on the local economy, along with expectations for business growth - despite conservative company expansion plans for the next twelve months.

Concerns about talent retention, the external economic environment and increased operating costs were mentioned as weighing heavily on the minds of CFOs for the coming year, according to the American Express Hong Kong Business Momentum Survey 2013.

When asked about their views on economic growth in the next 12 months, CFOs in Hong Kong had divided views.

Encouraged by recovering US and European markets, 20% of finance executives expressed optimism for either a substantial or modest economic expansion in Hong Kong whereas 21% felt the reverse with a contraction in the next 12 months.

However, majority of those surveyed (59%) reported they expect a flat economic outlook – many see the business opportunities from the gradual economic recovery globally being offset by the rising costs, primarily from the Chinese market.

Looking at their company growth for 2014, CFOs have shown more confidence as 83% of respondents see business growth or a similar performance. Nonetheless, as far as the scale of their operations is concerned, 68% of finance executives will be seeking to maintain the current company size with a further 23% saying there will be a moderate or substantial business expansion.

“Companies in Hong Kong are looking to ‘do more with less’ in a business environment with uncertainties, and C-level executives should always look for solutions that meet their needs to achieve cost optimization,” commented Sheahan.

Mirroring the prudent outlook shared by CFOs in Hong Kong and their plan to maintain a static business size, almost 8 out of 10 (78%) companies plan to keep the same level of headcount next year.

15% of respondents who plan to increase the staff size indicated their hiring intentions will focus on driving business growth (e.g. sales and marketing) than support function upgrades (e.g. logistics and IT).