Hong Kong SMEs’ second-quarter business confidence shaky as consumer spending remains a concern
- The Standard Chartered Hong Kong SME Leading Business Index rose 3.6 points quarter on quarter to 47.3, but was below last year’s level of 52.8
- Retail-oriented SMEs worried by the increase in spending by Hongkongers on the mainland
Confidence among small and medium-sized enterprises (SMEs) in Hong Kong’s business climate has improved slightly, but it remains well below the year-earlier level when confidence soared on the back of the border reopening, according to a survey from the Hong Kong Productivity Council (HKPC) on Tuesday.
Small businesses are particularly worried by a shift in consumer spending by mainland visitors to the city, and Hongkongers rushing across the border to buy cheaply priced necessities, the survey showed.
The Standard Chartered Hong Kong SME Leading Business Index for the second quarter rose 3.6 points to 47.3 from the previous quarter, nearly the same as the fourth quarter of 2023. It was, however, below the 52.8 reading in last year’s second quarter.
A level below 50 indicates a negative outlook and above 50 a positive outlook.
“The survey does not necessarily represent a ‘higher for longer’ [optimism]” partially because of the short-term favourable sales and profit performance of SMEs, said Kelvin Lau, senior economist for Greater China at Standard Chartered.
