Standard Chartered SME Index for Q1 2015 at 50.1 Business Sentiment Improved yet Confidence Falls among Retailers

The “Standard Chartered Hong Kong SME Leading Business Index” (Standard Chartered SME Index) for the first quarter of 2015 has rebounded 2.2 points to 50.1. Announcing the survey findings today (20 January 2015), the Hong Kong Productivity Council (HKPC) noted the rise in business confidence in local SMEs as the Index reaches above the 50 no-change mark. The Retail Industry Sub-index, however, lacks lustre, having dropped significantly over the same period last year. 
 
Sponsored by Standard Chartered Bank (Hong Kong) Limited (Standard Chartered Hong Kong), the quarterly survey features an Overall Index comprising five Sub-Indices. In this quarter, all Sub-Indices have improved. SMEs are positive in the areas of “Staff Number” (53.5), “Investments” (53.3) and “Sales Amount” (51.7); yet the outlook for “Profit Margin” (44.9) and “Global Economic Growth” (40.5) remains bleak, despite an increase of 3.4 and 2.5 points in the Sub-Indices respectively.
 
For sectorial findings, both the Manufacturing (48.7), and the Import, Export & Wholesale (50.1) Sub-Indices show improvement; but the former remains below 50 due to the industry’s negative outlook on “Sales Amount”. The Retail Industry Sub-Index, on the other hand, fails to keep up the growth momentum of the last quarter. Due to reducing confidence in “Sales Amount” and “Profit Margin”, the Sub-Index drops 5.6 points to 47.6. This is the first time in two years that retailers express a pessimistic outlook for the first quarter.  
 
Mr Gordon Lo, Director (Business Management) of HKPC, said, “Local retailers expect a negative quarter ahead as the rapid growth in online shops has undermined business in traditional retail outlets. Retailers should adjust their marketing strategies, develop O2O (Online to Offline) business, and improve operation to brace for this post high-growth period. SMEs should also make good use of various Government support schemes, such as the ‘Retail Technology Adoption Assistance Scheme for Manpower Demand Management’ to enhance their competitiveness.”
 
Mr Kelvin Lau, Senior Economist, Standard Chartered Hong Kong, said, “The world economy continues to face plenty of uncertainty as it enters into 2015. So while the improvement in the Index in the first quarter of 2015 is welcomed, it is in part a natural rebound from the weak quarter prior, during which worries over China slowdown and local political uncertainties heightened. Recent macro data for Hong Kong continues to be mixed; we expect any further improvement in sentiment from here to be modest.”
 
The survey also gauged the views of SMEs on manpower shortages issue, which found that 35% of the respondents expressed difficulties in staff recruitment. The major reasons are enterprises could not afford the wages requested and were unable to find suitable candidates in the market. The Accommodation and Food, Information and Communications, and Manufacturing industries, in particular, expect high staff turnover in 2015. 
 
Mr Lo said, “The 2015 Policy Address states that the local labour force will decline from around 2018. In the long run, SMEs could adopt automation and information technologies to handle repetitive and low-skilled processes to tackle the issue. This will also help them reduce costs and enhance efficiency.” 
 
Conducted in December 2014, the survey successfully interviewed 803 local SMEs. To download a report of the “Standard Chartered Hong Kong SME Leading Business Index”, please visit the website: www.smeone.org. Results of the next survey will be released in April 2015.
 
For more details about the Index, please contact HKPC’s Mr Frederick Zhang at tel. (852) 2788 5795 or email: frederickzhang@hkpc.org. For other media enquiries, please contact Chloe Chau at tel. (852) 2788 6158 or email: chloechau@hkpc.org. 
 
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About “Standard Chartered Hong Kong SME Leading Business Index”
The “Standard Chartered Hong Kong SME Leading Business Index” is a forward-looking survey on local SMEs’ outlook on the overall business environment for the next quarter. For each quarterly survey, HKPC’s professional team interviews more than 800 local SMEs from the manufacturing, import/export trade and wholesale, retail, accommodation and catering services, information and communications, finance and insurance industry, professional services, and real estate industries. It covers SMEs’ outlook on their ‘sales amount’, ‘profit margin’, ‘investments’, ‘staff number’, and ‘global economic growth’ for the next quarter.
 
The Index is announced in January, April, July and October to provide a useful reference for the public and SMEs in making strategic decisions and resource allocation amid the changing business environment.
 
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Mr Jonathan Ho
General Manager
Corporate Communications
Tel: (852) 2788 6390
Fax: (852) 2788 5056
Email: jonathanho@hkpc.org
Website: www.hkpc.org
 
20 January 2015
 
 
Mr Gordon Lo (centre), Director (Business Management) of HKPC, announces the survey results of the
Mr Gordon Lo (centre), Director (Business Management) of HKPC, announces the survey results of the "Standard Chartered Hong Kong SME Leading Business Index" for the first quarter of 2015, accompanied by Mr Wilson Wong (left), General Manager (IT Industry Development) of HKPC; and Mr Kelvin Lau, Senior Economist of Standard Chartered Hong Kong.
 
 

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