Hong Kong SMEs are slowly rebuilding their confidence in doing business after a rocky start to the year, according to the Hong Kong Productivity Council.
The HKPC released the results of the Standard Chartered Hong Kong SME Leading Business Index for the second quarter, demonstrating that overall confidence increased by 5.6 points to 46 during the period – the sharpest growth for the last three years.
All five sub-indices of the overall index increased, with the index for staff numbers remaining at a positive level and reaching 53.
Meanwhile the investments (49.7), sales amount (45.6) and profit Margin (42.3) indices increased by 3.5, 7.6 and 7.6 respectively, while the global economic growth index recorded a relatively large increase of 10.4, bouncing back to 26.5.
“What we are seeing is a very broad-based rebound in SME confidence after a battered Q1 -- probably a normalization after being materially weighed down by prior deterioration in US-China trade dispute,” Standard Chartered Hong Kong senior economist Kelvin Lau said.
“We believe the latest readings are more in line with the fundamental picture, where a combination of better trade negotiation news headlines, a more dovish Fed in the US and generous policy stimulus in China should help create a floor to broad sentiment; but those alone are probably not enough to boost headline index back about 50 for now, or at least not until we see more concrete signs of the global business cycle bottoming out.”
The survey also found that ICT companies are most likely among all respondents to expect to be able to benefit from the Greater Bay Area development plan, at 52% of respondents.
Meanwhile 28% of surveyed companies report that they intend to refer to the plan while formulating a development plan, and 26% will speed up digital transformation as a result.
“Local SMEs confidence are seen bouncing gradually, despite the uncertainties in global economic headwinds. SMEs are encouraged to speed up their digitalisation progress and expand their business in the fast-growing ASEAN markets and grasp opportunity of the GBA Planning,” HKPC chief innovation officer Dr Lawrence Cheung said.
“HKPC is dedicated to support enterprises to explore the GBA by organising seminars regularly for the industry to exchange latest market technology and information. Despite this, HKPC has been promoting the government’s enhanced ‘Dedicated Fund on Branding, Upgrading and Domestics Sales’ (the BUD Fund), to further assist Hong Kong enterprises in exploring the ASEAN and the Mainland China markets as well as regions that will sign Free Trade Agreement with Hong Kong later on.”