Navigating the Headwinds: Hong Kong's Small Businesses See Glimmers of Hope Amidst Ongoing Challenges
Hong Kong's SME Sentiment Shows Modest Rise in September
During September 2025, Hong Kong's small and medium-sized enterprises (SMEs) experienced a marginal improvement in their business outlook. According to the latest Monthly Survey on Business Situation of SMEs from the Census and Statistics Department (C&SD), the overall conditions for these businesses continued to operate within a contractionary phase, despite the slight uplift in mood.
Business Receipts Index: A Closer Look at Performance
The diffusion index (DI) for overall business receipts recorded an increase, reaching 43.8 in September, up from 42.3 in August. This upward movement suggests a positive shift, albeit a small one. However, it is crucial to note that this figure remained below the critical 50-point threshold, which signifies a neutral stance where the number of businesses reporting increases equals those reporting decreases. A reading below 50 indicates that a larger proportion of SMEs experienced a decline in business receipts compared to those that saw an increase.
October Outlook: Lingering Caution Among Businesses
Looking ahead to October, the outlook DI continued to reflect a contractionary trend, standing at 47.2. This suggests that whilst September brought some positive changes, businesses remained somewhat cautious about the immediate future.
Sectoral Performance: Real Estate Leads the Way in Recovery
Analysis of individual sectors revealed widespread improvements across the board during September. The real estate sector demonstrated the most significant progress, with its index climbing from 43.9 to 47.1. Other sectors also reported positive movements: retail trade saw an improvement to 42.8 from 41.1, and logistics rose to 42.2 from 40.5. Additionally, the import and export trades observed a resurgence in new orders, with their current DI increasing to 46.5 from 44.2 in August, and the outlook for October reaching 47.3.
Government's Assessment and Future Monitoring
In response to the survey findings, the Government issued a statement acknowledging the "improved further" sentiment amongst SMEs and the short-term business outlook for September. The report also highlighted the stability of employment across the SME sector. Officials pointed to the resilience of the local economy and sustained growth in the broader Asian region, particularly in Mainland China, as key supporting factors. Nevertheless, the government also recognised the presence of ongoing external uncertainties and affirmed its commitment to closely monitoring the economic situation to address any potential challenges effectively.