HONG KONG – Overall business sentiment among small and medium-sized enterprises in Hong Kong softened further in June, according to a monthly survey of SME business situation.

The current diffusion index on business receipts amongst SMEs decreased from 43.0 in May in the contractionary zone to 41.4 in June 2024, survey results released by the Census and Statistics Department showed on Wednesday.

The overall expectations on the business situation in one month's time also turned slightly weaker, the survey shows.

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Analyzed by sector, the current diffusion index on business receipts for majority of the surveyed sectors dropped last month as compared with May, particularly for the restaurants and retail trade, which dropped from 39.1 to 33.3 and from 42.9 to 39.9, respectively.

The performance of both retail and catering industries is subject to change having regard to the consumption patterns of visitors and residents as well as the strength of the Hong Kong dollar.

Bernard Chan Pak-li, Under Secretary for Commerce and Economic Development, HKSAR  

The survey also showed that the current diffusion index on new orders for import and export trades fell from 45.2 in May to 44.1 in June.

But some sectors expected relative improvement, a spokesman for the Census and Statistics Department said, adding that the overall employment situation remained generally stable.

While geopolitical tensions and changes in the consumption patterns of visitors and residents will affect business sentiment in the near term, the central government's various measures that benefit Hong Kong and continued growth of the local economy should provide support, the spokesman added.  

After recording a year-on-year increase in the value of total retail sales in January and February this year, a decrease occurred from March to May, Under Secretary for Commerce and Economic Development Dr Bernard Chan Pak-li said while replying to a query in the Legislative Council on Wednesday.

In the first five months this year, the value of total retail sales was on average around HK$32.3 billion per month, a 6.1 percent fall when compared with the same period in 2023. For the total restaurant receipts, the monthly average in the first quarter of 2024 was around HK$9.4 billion, an increase by 2.3 percent year-on-year, he added.

The performance of both retail and catering industries is subject to change based on the consumption patterns of visitors and residents and the strength of the Hong Kong dollar, Chan said.

“Nevertheless, the new measures benefitting Hong Kong as announced recently by the country, including extending the scope of the Individual Visit Scheme to 59 cities and increasing the duty-free allowance for luggage articles brought into the mainland from Hong Kong by visitors who are mainland residents to RMB12,000 should help attract the spending of mainland visitors, thereby boosting the local retail and catering industries.”

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He expressed his hope that the Hong Kong Special Administrative Region government's efforts in promoting mega event economy and pursuing the concept of "Tourism is everywhere in Hong Kong" will bring support to the retail and catering industries.

Detailing various government steps taken throughout the years to assist the city’s enterprises, especially the SMEs, he said the government has allocated funding to launch the Digital Transformation Support Pilot Programme, under which subsidies will be provided on a one-to-one matching basis to assist SMEs in retail and food and beverage industries in applying e-payment and other ready-to-use basic digital solutions.

The Hong Kong Monetary Authority has been encouraging the banking sector to support SME customers under prudent risk-management principles and has introduced nine SME support measures jointly with the Banking Sector SME Lending Coordination Mechanism in March this year to support the financing needs of SMEs and increase their bargaining power, he added.