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Business optimism dented as SMEs “stayed cautious” in May

The diffusion index declined to 44.3 in May from 47.1 in April.

Small and Medium Enterprises (SMEs) “stayed cautious” in May, a government spokesman said, as the Census and Statistics Department reported a decline in the diffusion index (DI) on business receipts.

“Compared with the preceding month, the sub-indices for most sectors fell within the contractionary zone,” a government spokesman said.

“Nevertheless, that for the restaurants sector held steady in the expansionary zone.”

The current DI on business receipts amongst SMEs declined to 44.3 in May from 47.1 in April. The outlook in June 2021 is expected at 48.3.

Analysed by sector, the DI on business receipts went down to 37.8 from 45.9 and to 44.5 from 48.6 in wholesale trade and business services, respectively.

The current DI on new orders for the import and export trade also slipped to 46.4 from 47.9 over the same period. The outlook DI on new orders is 47.9.

“Business sentiment going forward would continue to hinge on the development of the epidemic situation and the pace of global economic recovery,” the spokesman said.

“It is thus pivotal for the whole community to do our best to prevent and fight the disease together and actively participate in the vaccination programme.”

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