SMEs downcast over prospects

June Chen

Business sentiment in Hong Kong's small and medium enterprises has worsened following Donald Trump's return to the White House, a survey shows.

The Standard Chartered Hong Kong SME Leading Business Index fell by 2.9 points quarter-on-quarter to 42.8 points, indicating overall business confidence of local small and medium-sized enterprises has become more conservative under the uncertain global economic outlook, the Hong Kong Productivity Council said.

Figures below 50 indicate a negative outlook while those above 50 show a positive one.

The index showed that confidence among 38 percent of SMEs has been hit by the newly inaugurated Trump administration and more than 60 percent of them are concerned about the US president's proposed tariffs.

However, Kelvin Lau, a senior economist at Standard Chartered Bank said SMEs in Hong Kong should keep faith in their performance in the coming quarters, as the market expects the US to impose tariffs gradually and China to launch more stimulus after its annual legislative meetings in March.

He said the most uncertain time "may have passed" and SMEs can now estimate how much they might be affected.

"We're hoping that we can also benefit from more policy easing from the US and from China as well. Hopefully global soft landing will help Hong Kong maintain a modest pace of recovery," he said.

Conducted by the HKPC and sponsored by Standard Chartered (Hong Kong), the quarterly survey offers insights into the forthcoming business climate.