Hong Kong’s small and medium-sized enterprises could see a further hit in business sentiment due to the uncertainties surrounding the Chinese economy, according to an economist.
SME business sentiment may hit a new low in the current quarter or the next, says Kelvin Lau, senior economist at Standard Chartered Bank (Hong Kong) Ltd.
China’s economy is likely to hit a trough in 2016 and remain depressed for a while before possibly picking up steam towards the end of the year, the Hong Kong Economic Journal cited Lau as saying.
A survey conducted recently by StanChart and the Hong Kong Productivity Council showed that Hong Kong SME business sentiment has plunged to the lowest in three years.
Sixty-one percent of the firms that participated in the survey felt the local economy is at a bottom now, with 24 percent saying that the situation is even worse than what it was in 2008.
Fourteen percent of the respondents said they are considering a wage cut or freeze, while 8 percent said they might undertake some layoffs.
About 2 percent of the responding firms said business was so bad that they are even thinking of suspending their operations.
The Productivity Council, meanwhile, called on SMEs to introduce fresh elements, such as online-to-offline model, to their businesses so that they can enter new market segments.
– Contact us at [email protected]