SMEs in Hong Kong stayed “cautious” in March

Diffusions index in March dropped slightly to 44%.

Small and Medium Enterprises (SMEs) seem to be treading lightly, with the Census and Statistics Department (C&SD) reporting business receipts in March dropped slightly month-on-month.

The current diffusion index (DI) on business receipts decreased to 44% from 44.4% in February 2021. Outlook DI on business receipts for April was 47.8. 

Current DI on business receipts dropped to varying degrees in almost all sectors, with restaurants being the major exception. It saw an 11.9-point increase to 57.4 from 45.5. 

“Business sentiment among SMEs stayed cautious in overall terms in March,” a government spokesman said.

“The sub-indices in many sectors decreased, but that for restaurants rose notably and returned to the expansionary zone thanks to the relaxation of social distancing measures since mid-February.”

The spokesman said sentiments of SMEs will see improvement if the outbreak in the city continues to recede and once economic recovery is sustained across the globe.

“The large-scale counter-cyclical measures unveiled by the 2021-22 Budget will also help cushion the pressure facing the economy.”

The Hong Kong government is now planning to relax social distancing measures amongst individuals and businesses whose staff have received COVID-19 vaccines.

This is expected to allow establishments to extend operating hours and raise capacity.

Also read: What you need to know about the “vaccine bubble”

Moreover, the C&SD said wholesale trade, and import and export trades, likewise, increased to 50 from 45.6 and to 44.6 from 43.9, respectively.

The current DI on new orders for the import and export trades increased to 46.4 in March 2021 from 45.7 in February 2021, whereas the outlook DI on new orders in April 2021 was 49.2.