The UOB Business Outlook Study 2025 (SMEs and Large Enterprises) reveals that Hong Kong businesses continue to demonstrate resilience and a forward-looking approach despite the imposition of US tariffs. The study, which surveyed 560 medium and large enterprises in HK, provides insights into the current business sentiment and future strategic priorities.
While overall business sentiment has softened – declining from 73 percent in 2024 to 40 percent following the tariff announcement – nearly half (45 percent) of respondents remain optimistic, reflecting a sustained commitment to long-term growth.
Strategic priorities amid economic headwinds
Over the next one to three years, businesses are prioritising customer acquisition (28 percent), digitalization (27 percent), and revenue development (22 percent). These focus areas reflect a proactive approach to navigating economic headwinds and capitalising on emerging opportunities.
At the same time, rising operational costs (34 percent), persistent inflation (31 percent), and high manpower expenses (27 percent) are weighing on business performance. Notably, 49 percent of respondents anticipate inflation to rise further in response to the tariffs, adding to the pressure.
Strengthening supply chains through diversification
With more than 60 percent of businesses reporting supply chain disruptions, resilience has become a top priority. Inventory management and limited network for business collaboration are the most pressing concerns, each by 25 percent of respondents. Additionally, 42 percent foresee further disruptions stemming from the latest tariffs.
To counter these challenges, businesses are diversifying sourcing strategies and identifying alternative raw materials, particularly within ASEAN and North Asia. This shift toward regional sourcing and strategic diversification aims to mitigate risk and ensure operational continuity.
Ms. Adaline Zheng, CEO of UOB HK, said, "The findings from our UOB Business Outlook Study 2025 highlight how HK businesses are adapting with agility and foresight. From strengthening supply chains, accelerating digitalization and sustainability efforts to expanding into regional markets, businesses are taking decisive steps to future-proof their operations. At UOB, we remain committed to supporting our clients with tailored financial solutions, market insights, and strategic partnerships that empower them to thrive in a dynamic environment. Together, we can build a more resilient and sustainable future for the region."
Overseas expansion remains a strategic focus
Despite ongoing global uncertainties, 75 percent of businesses plan to expand internationally within the next three years. The strongest intent is seen in the technology, media, and telecommunications (85 percent), business services (81 percent), and wholesale trade (81 percent) sectors, driven by the pursuit of improved profitability.
ASEAN and the Chinese Mainland are the top target markets, driven by a clear pursuit of improved profitability (57 percent), enhanced international reputation (47 percent), and sustainable revenue growth (46 percent). However, challenges such as limited access to new customers, scaling difficulties, inadequate financial support, and insufficient market knowledge remain. Addressing these barriers will require enhanced financial solutions, access to business intelligence, and strong local partnerships.
Sustainability gains momentum
Sustainability is becoming a core business priority, with 50 percent of businesses having implemented related practices. The business services (63 percent) and industrials, oils, and gas (53 percent) sectors are leading the way, viewing sustainability as a lever for brand enhancement (52 percent), talent attraction (40 percent), and competitive advantage (40 percent). Despite this progress, increased costs (32 percent) and limited funding options (29 percent) remain key obstacles to broader adoption.
Digitalization as a growth enabler
Digital transformation remains central to business strategy, with more than 80 percent of businesses having adopted digital solutions. Key benefits include improved customer experience (32 percent), enhanced productivity or efficiency (32 percent), and better decision-making (30 percent). Looking ahead, more than 70 per cent of respondents plan to increase digital investments in 2025, signalling a strong commitment to leveraging technology for long-term growth.
The UOB Business Outlook Study 2025 (SMEs and Large Enterprises) aims to understand the business outlook and key expectations among SMEs and large enterprises across seven markets in ASEAN and Greater China – Singapore, Indonesia, Malaysia, Thailand, Vietnam, the Chinese Mainland and HKSAR. Conducted annually in Singapore, the study has included the broader ASEAN and Greater China markets since 2023. Full insights from the HK findings are available on the webpage.
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