Hong Kong’s small and medium-sized enterprises are very pessimistic about the business outlook, according to a leading business index.
The Standard Chartered Hong Kong SME Leading Business Index declined to 42.8 in the first quarter, from 44.4 in the previous three months, the Hong Kong Economic Journal reported on Friday.
It was the lowest level since the Hong Kong Productivity Council (HKPC) started conducting the quarterly survey.
The three major sector indices remained below 50, with manufacturing at 41.1 and imports/exports and wholesale at 41.6, both at historical low. The retail sector index advanced 2.4 points to 42.7.
The figures indicate that SMEs are worried over the return of the interest rate hike cycle in the United States, HKPC acting vice president Wilson Wong said.
Nonetheless, 72 percent of the SMEs plan to maintain their wage levels, while 26 percent are considering increasing their staff salaries by an average of 4.1 percent, indicating that there is yet to be an alert on downsizing and wage cuts.
The council called on SMEs to leverage on the internet and establish online platforms to raise competitiveness.
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