SMEs Expect Improving Business Operating Environment: Survey

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Last updated at: (Beijing Time) Thursday, April 18, 2002

SMEs Expect Improving Business Operating Environment: Survey

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Local small and medium-sized enterprises (SMEs) in general anticipate Hong Kong's business operating environment to improve this year, according to the latest findings of a survey released by the Hong Kong Productivity Council (HKPC) Thursday.

The quarterly survey on "Business Operating Environment Index for SMEs" showed that 55 percent of the 595 SMEs interviewed rated the overall business operating environment as "improving", an increase of 9 percent compared to the last survey conducted in December 2001.

The survey aims to provide a useful reference for Hong Kong's SMEs in the areas of market opportunity, financial and investment situation, operating costs, human resources and risk assessment.

Of the market opportunity index, the survey showed it recorded an increase of 22 percent.

It showed that SMEs are regaining confidence in the market with China's entry into the WTO and the improved U.S. economy bringing with more business opportunities, said General Manager of HKPC Vincent Li.

On the human resources index which increased 7 percent, Li said it is indicative of an ample supply of human resources in the local market.

On the risk assessment index which recorded an increase of 14 percent and the operating cost index which slightly increased 2 percent, the general manager said it showed that SMEs are able to control operation cost under the present economic situation.

On the financial and investment index which dropped 2 percent, li said, "This could be attributed to the expectation of an increase in interest rate as the U.S. economy continues to improve. "

The survey showed that 45 percent of local SMEs forecast an increase in business volume, up 16 percent from the last survey and about 50 percent of SMEs expected to make a profit for their business in the coming 12 months, with 24 percent forecasting a considerable or stabilized profit, an increase of 12 percent from the last quarter's.

Regarding the recent recovery of the U.S. economy, 36 percent of the SMEs believed that its impact on their businesses could be realized after 6 months while about 30 percent has already felt the impact.

Commenting on the government 2002-03 Budget, the majority of the SMEs accepted the government's proposal on "Mainland/Hong Kong Closer Economic Partnership Arrangement" and the relief measures such as freezing Government fees and charges.

About 70 percent of the SMEs considered the tax on boundary facilities improvement as acceptable. However, only 30 percent agreed on the prediction of economic growth of 3 percent over the medium term."

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