April 27, 2023
HONG KONG – Business confidence among Hong Kong’s small and medium-sized enterprises has reached its second-highest level since 2012, a new survey shows.
The Standard Chartered Hong Kong SME Leading Business Index for the second quarter this year, released on Tuesday, saw an increase of 6.1 points to 52.8 from the previous quarter, exceeding the 50 neutral indicator for the first time since the COVID-19 outbreak. The survey, which saw 809 local SMEs interviewed, was conducted by the Hong Kong Productivity Council in mid-March.
The maintenance of a stable index for the finance and insurance sector defies the turbulence among influential global banks, Lau said, adding that the negative impact will be temporary
All five subindices — recruitment sentiment, investment sentiment, business condition, profit margin and global economy — rose, with the profit margin posting the largest increase. Global economy, the only subindex below 50, increased by 1.3 points to 48.3.
“Given the global banking turmoil when the survey was conducted, the relatively muted performance of the subindex is reasonable, suggesting that SMEs remain cautious about the outlook of the global economy in the face of certain challenges and pressures,” said Kelvin Lau Kin-hang, senior economist of Global Research for Greater China of Standard Chartered Bank Hong Kong.
Ten of the 11 major industry indices, except for finance and insurance, surged in the second quarter. Seven exceeded the 50 neutral indicator, with accommodation and food services ranking first with an index of 67.2. Although four industries stood below 50, they all recorded increases of 2.4 to 10.2 points.
The maintenance of a stable index for the finance and insurance sector defies the turbulence among influential global banks, Lau said, adding that the negative impact will be temporary.
HKPC Chief Digital Officer Edmond Lai Shiao-bun said this quarter‘s figures show that Hong Kong’s economy is regaining momentum, and is on a path to provide a stable and favorable business environment for SMEs.
He noted that the latest Budget predicted that 2023 will be a year of significant rebound, with growth of 3.5 percent to 5.5 percent. The results of this survey echo that forecast, Lai said, with soaring business confidence of SMEs of more than half of the industries.
The survey shows that the COVID-19 pandemic has changed the operation and sale models of SMEs. The vast majority of companies surveyed expressed their willingness to embrace such changes as video conferencing, electronic payments and remote working after the pandemic.
To assist SMEs in adapting to new business models, the HKPC has launched the ‘Digital DIY Portal’ one-stop platform to support enterprises to cooperate with different providers for cost-effective and efficient digital utility solutions, according to Lai.
Regarding any fallout since COVID-19, about one-third of SMEs said their turnover had returned to or exceeded pre-pandemic levels, with the construction industry reviving the fastest. Around 62 percent of SMEs revealed plans to launch new development projects this year, with those in the information and communication and retail industries being the most ambitious. New plans include investment in research and development, development of e-commerce, and enhancement of digital applications in operations.
“Through a variety of advisory and support services, the HKPC strives to encourage SMEs to use advanced technologies to achieve transformation and upgrading,” said Lai.