The Hong Kong Productivity Council announced the fourth quarter of 2019, the Standard Chartered Hong Kong SMEs Leading Business Index
The Composite Business Index fell 7.6 to 31.4, falling to a historical low, indicating that SMEs’ business confidence continued to be weak.
The Group’s five sub-indices fell across the board. The “business conditions" recorded a large decline, falling to 24.2, the “global economy" fell to the unit figure of 8.9, the “recruitment intention" fell to 47.6, and the “investment intention" fell to 36.1. “Profit Performance" fell to 23.6.
In terms of industry, the three major industry sub-indices fell across the board from the previous quarter, with retail sales falling the most, down 7.2 to 27.3; manufacturing sub-index (29.3) down 6.2 from the previous quarter; import and export and wholesale index being 29.9, micro Drop 3.8.
Digital technology applications should be business trends
Liu Jianheng, senior economist of Standard Chartered Bank (Hong Kong) Greater China, expects that the market conditions in the fourth quarter will not be significantly improved. Since August this year, Sino-US trade tensions have continued to heat up, and the risk of spreading to issues outside the trade has also risen. Together with local social events, it has affected local business sentiment.
He continued to point out that the SMEs interviewed expect a significant contraction in sales and earnings performance in the fourth quarter. Faced with the challenges brought by the current operating environment, SMEs’ investment intentions are significantly more cautious than hiring intentions.
In the face of the challenges of the business environment, about 70% of the SMEs surveyed agree that the development of new markets can break through the current business dilemma, with information and communications, manufacturing, import and export trade and wholesale industries as the mainstays
SMEs that have opened up markets in Southeast Asia, Dawan District and other parts of China are 29%, 27% and 26% respectively. The survey also found that about 86% of respondents agreed that digital technology applications are the future trend of business development.
Zhang Yichang, chief innovation director of the HKPC, said that the number of applications for the BUD special fund in the third quarter increased by 40% compared with the second quarter. As the fund is increased to 2 million yuan, the number of applications is expected to increase significantly in the future.
As it is difficult for SMEs to complete the application form, he said that the Administration would provide advice to SMEs to reduce the chance of error in submitting applications. The Administration is negotiating with the Government to reduce the application process and expedite the approval of funds. The Administration has also produced the ASEAN Manufacturing Development Guide – Opportunities and Challenges to provide SMEs with access to ASEAN market information and to extend production lines to new markets.