SME leading business index up 11.4 points in Q32022: HKPC

All sub-indices rebounded during the quarter.

The Standard Chartered small and medium-sized enterprises (SME) leading business index went up 11.4 points to 47.1 for the third quarter of 2022, following the biggest drop in the previous quarter, the Hong Kong Productivity Council (HKPC) said.

“The results showed an overall steady recovery of business confidence across industries after being severely hit by the fifth wave of the pandemic,” read the statement.

All five sub-indices rebounded, amongst which, Investment Sentiment (51.1) and Recruitment Sentiment (50.5) returned to above 50 neutral levels. Business Conditions (up 19.1 to 46.0) and Profit Margin (up 18.3 to 43.6) reported the most significant upturn and exceeded the level before the fifth wave in the first quarter of 2022. 

The global economy, however, (up 13.7 to 37.5) failed to return to the 40 level.

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Per industry, retail rebounded by 17.4 to 48.6, manufacturing recovered by 13.2 to 46.8, whilst import and export trade had the slowest recovery with a 7.8 increase to 43.7.

Meanwhile, the proportion of surveyed SMEs seeing an increase in raw material costs in the coming quarter slightly declined to 70% this quarter, after the consecutive rise over the past seven quarters. 

“More SMEs expected an increase in staff salary and product / service price in the coming quarter when compared with the previous quarter, accounting for 21% and 28% respectively,” read the statement.

On their expectations of overall investment, 92% of SMEs see overall investment to remain unchanged or increase, up 10%-point from 82% in the last quarter.