SMEs remain in ‘expansionary’ territory in Q4 2022

This is for the eighth consecutive quarter, OCBC noted. 

The OCBC SME index remained “slightly expansionary” at 50.2 in the fourth quarter of 2022, the bank reported. 

This is the eighth consecutive quarter it sustained its expansion, but this was down from 51.9 in the third quarter.

"In the midst of growing macro headwinds, the OCBC SME Index remained expansionary for the eighth consecutive quarter in 4Q 2022,” Linus Goh, Head of Global Commercial Banking, OCBC Bank, said.

“SMEs are quite optimistic about the outlook for the first half of 2023 and are closely watching China's re-opening to guide expectations in the second half.”

Read more: Greater Bay Area SMEs show ‘strong appetite’ for financial services

The Index is likely to stay unchanged within a narrow range or ease slightly in the first quarter of 2023 as global macro risks remain. 

The OCBC SME Business Outlook poll, which surveyed more than 2,000 small and medium enterprise owners, was conducted in January 2023.

“SMEs were positive about the business outlook in the near term, ahead of the festive season in January,” the report found.

In particular,  47% expect an improvement in their business over the first half of 2023, while 38% expect their performance to remain the same. Only 15% expect a decline in performance. 

The SMEs with higher growth expectations were in Business Services, Building & Construction, Education, and ICT.