Hong Kong SME Leading Business Index hits 3-year high in Q3 as business confidence returns
The overall Standard Chartered Hong Kong SME Leading Business Index rose by 4.4 to 46.6 in the third quarter this year, the highest since Q3 in 2018, as small and medium enterprises (SMEs) regained business confidence amid the gradual easing of the COVID-19 situation in the city, said the Hong Kong Productivity Council (HKPC).
Edmond Lai, Chief Digital Officer of HKPC, said in a news conference on Tuesday, “The survey shows that SMEs are flexing their muscles to pick up their business as fast as possible by increasing investment and expanding staff size.”
Kelvin Lau, senior economist of Greater China at Standard Chartered Bank Hong Kong Limited, expected the positive momentum to remain intact in the second half of 2021, backed by further development in the IT industries and a recovery in the real estate sector. The overall index, which is compiled by HKPC and sponsored by the Standard Chartered Bank, rose for three consecutive quarters despite it was still below the neutral mark of 50.
All five component sub-indices were up and among which the “global economy” recorded the most significant growth to 52.8 from 43.6 a quarter earlier, said Mr. Lai. It was followed by recruitment sentiment of 50.9 and investment sentiment of 49.1.
Talking about SME’s perspective and planning in response to the economic recovery this year. The business performance of information and communications was the best as 56% of the SMEs surveyed said that their business returned to the levels before the pandemic or fared better than that, while accommodation and food services were the most affected, with 81% of SMEs reporting a setback in business.
The retail industry index also recorded a surge, rising by 10.7 to 46.9 quarter on quarter due to the continued unwinding of social distancing measures since the first quarter in 2021, said Mr. Lau. But he said the confidence in the sector has picked up while “it is not the time to relax yet”, as the overall index was still below the normal level.
“Export-oriented industries, such as manufacturing, export and wholesale industry are facing the pressure from inflation and soar of raw material prices,” he said, adding that the unstable epidemic situation caused by the mutant virus would also affect foreign trades.
The government would implement the Consumption Voucher Scheme next month and Mr. Lau said that the scheme would push the recovery in the retail sector in a short period of time, but retailers need to seize the chances to adapt to the new business environment to achieve long-term development.
The index came from a forward-looking survey of 815 local SMEs to see their outlook on the overall business environment in the third quarter.
《The Young Reporter》
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