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Situation of SMEs remains stable as diffusion index rises to 48.6

Despite the increase, the index was still in a contractionary zone.

Overall business sentiment amongst small and medium enterprises (SMEs) remained stable in May as the diffusion index (DI) on business receipts only increased slightly to 48.6, data from the Census and Statistics Department (C&SD) showed.

In April, DI was 48.3.

Whilst recording an increase, the index remained in the contractionary zone during the month. The outlook DI on business receipts, on the other hand, was in an expansionary zone at 51.3.

Across sectors, DIs on business receipts also improved compared with the previous months, led by business services (from 43.1 to 50.0) and import and export trades (from 45.4 to 47.2). 

On the flip side, real estate and retail trade saw a decrease, declining from 53.5 to 45.6, and 53.1 to 49.4, respectively.

READ MORE: Business receipts of major service industries drop double digits in Q1

Meanwhile, DI on new orders for the import and export trades edged up from 46.5 in April 2022 to 46.6 in May 2022, whereas the outlook DI on new orders in one month (i.e. June 2022) was 50.3.

A government spokesperson said the stabilisation of the employment situation helped improve the view on the business situation of SMEs.

"While rampant inflation in some major economies, monetary policy tightening by respective central banks and tensions in Ukraine will continue to cloud the global economic outlook, the stable local epidemic situation should help support business sentiment in the near term," said CS&D citing the spokesman.

READ MORE: SME receipts diffusion index dips to 29.9 for February

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