SME business sentiment remains cautious in April

Business receipts stayed in contraction, even as the near-term outlook improved.

Small and medium-sized enterprises (SMEs) remained cautious in April, with business receipts staying in contractionary territory, according to the Census and Statistics Department.

The current diffusion index on business receipts amongst SMEs slipped to 44.0 in April from 44.3 in March. A reading below 50 indicates that business conditions are generally unfavourable.

Despite the decline, the one-month-ahead outlook index for business receipts rose to 47.5 for May, suggesting some improvement in near-term expectations, although sentiment remained below the neutral 50 mark.

Several sectors saw weaker business receipts during the month. Restaurants recorded the sharpest decline, with the index falling to 38.1 from 40.6 in March.

The index for import and export trades dropped to 45.4 from 46.3, whilst wholesale trade fell to 41.3 from 42.2.

For new orders in import and export trades, the current index decreased to 46.1 in April from 46.8 in March. The one-month-ahead outlook index for new orders stood at 47.9.

A government spokesman said business sentiment amongst SMEs was still cautious in April amid ongoing geopolitical tensions in the Middle East, although the situation had stabilised somewhat.

The spokesman added that the overall employment situation remained generally steady.