Confidence in Hong Kong SMEs hit record high

It's now at 53.4.

According to Standard Chartered Hong Kong SME Leading Business Index , sentiment towards Q1-2014 among small and medium-sized enterprises (SMEs) in Hong Kong improved to positive from neutral in Q4-2013. 

The index rose to 53.4 for Q1-2014 from 50.0 in Q4-2013.

The headline index now stands at a record high, as do all its five main sub-components. Strong hiring and investment expectations continue to reflect commitment to business expansion, while the jump in sales expectations translates into a more positive margin outlook as companies pass on higher costs to customers.

Here's more from Standard Chartered:

We believe the evident deterioration in the wage sub-index is largely seasonal, reflecting expectations of wage hikes during the first few months of 2014.

The manufacturing sub-index has gone from being the most pessimistic of our three main industry sub-indices to the most optimistic since our last survey.

This is in line with our view that Hong Kong companies are well positioned to benefit from a pick-up in global growth, helped by improvements in the US and Europe, and a steady China as it pursues various reforms. All this implies that a positive spillover is in store for importers, exporters and wholesalers in the coming quarters. The steady retail sector sub-index (and a strong reading for the accommodation and food services sector) underpins our longstanding view that Hong Kong‟s domestic story remains resilient thanks to a tight labour market and tourist inflows.