August 10, 2022
HONG KONG – Business confidence of small and medium-sized enterprises in Hong Kong weakened in July due to the deteriorating external environment and the increase in local COVID-19 infections, a survey released on Tuesday showed.
The current diffusion index on business receipts among SMEs decreased from 46.3 in June to 43.4 in July, according to the monthly published survey by the Census and Statistics Department.
The majority of sub-indices of the surveyed sectors declined compared with the previous month. The index for real estate fell from 48.2 to 42.5, and the index for import and export trades went down from 46.3 to 41.1.
A government spokesperson warned that “worsening global economic prospects and the stepping up of monetary policy tightening by major central banks will continue to put pressure on the business sentiment, especially the externally-oriented sectors”
The current diffusion index on new orders for the import and export trades declined 4.3 points to 43.1 in July.
A reading above 50 indicates a favorable business condition, whereas that below 50 suggests otherwise.
However, the survey expects the diffusion index to pick up in August, with the index for business receipts and new orders climbing to 48 and 46.9 respectively.
A government spokesperson warned that “worsening global economic prospects and the stepping up of monetary policy tightening by major central banks will continue to put pressure on the business sentiment, especially the externally-oriented sectors.”
The second round of consumption vouchers will give support to the consumption-related sectors, but their business situation will depend on the city’s COVID-19 development and financial conditions, the spokesperson added.
Hong Kong reported 4,045 coronavirus cases on Tuesday and three more deaths. The overall caseload reached 1,393,327, and the number of related fatalities stood at 9,550.
The overall employment sentiment also showed softening, with the current diffusion index on employment decreasing from 49.8 to 49 in July, from a month earlier.
The survey covers 600 SMEs with fewer than 50 employees each. The bulk of the data was collected in the last week of July.