SME confidence falls to 7-year low

Business | Kevin Xu 6 May 2020

The business confidence of Hong Kong's small and medium enterprises fell to a seven-year low in the second quarter due to the coronavirus outbreak, a survey showed.

The Standard Chartered Hong Kong SME Leading Business Index dropped 6.9 percentage points to 26.2 in the second quarter from the first three months.

The survey was conducted in early to mid-March and comprised 806 local SMEs.

All three major industry sub-indices fell in the second quarter, with the manufacturing industry recording the steepest drop.

The manufacturing industry sub-index fell by 8 points quarter-on-quarter to 26.2, the retail industry falling 4.8 points to 20.7, and the import/ export trade and wholesale industry sub-index falling 5.4 points to 25.2.

Kelvin Lau, a senior economist at Standard Chartered Hong Kong, expects the contraction in Hong Kong's economy to be deeper in the second quarter compared to the first three months.

The economy contracted by 8.9 percent in real terms in the first quarter from a year earlier, the government reported.

Lau previously estimated Hong Kong's jobless rate is likely to reach 5.5 percent within the year before falling back to 5.2 percent at year-end.

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