Hong Kong Productivity Council said the Standard Chartered Hong Kong SME Leading Business Index hit its lowest point since the second quarter of 2022, dropping 3.3 points to 40.5 points for the third quarter this year.
Figures below 50 indicate a negative outlook and those above 50 indicate a positive one.
Among the five component sub-indices, "global economy" dropped for three consecutive quarters to 20.6.
Industry indices of "Accommodation and Food Services" and "Construction" posted growth out of 11 industries, driven by the boost from mega events and the completion of major government infrastructure projects.
Kelvin Lau Kin-hang, Standard Chartered Hong Kong's senior economist for Greater China, said that SMEs’ business confidence was more cautious due to the uncertainty surrounding US tariff policies, despite the two quarters of robust growth in Hong Kong's economy.
He expected the growth of Hong Kong's exports would slow down in the next half year, as the tariffs would impact export markets outside the US.
As the recent Hong Kong interbank offered rates rose and the Hong Kong-US interest rate spread went back to a normal level, Lau also forecasts the three-month Hibor would rise above 3 percent at the end of the third quarter, while it would still be lower compared with 4 percent at the beginning of 2025.
HELEN ZHONG
