The Standard Chartered Hong Kong SME Leading Business Index dropped to 40.5 for the third quarter of 2025, down 3.3 points from the previous quarter and marking its lowest level since the second quarter of 2022.
The Hong Kong Productivity Council (HKPC), which conducts the quarterly survey, attributed the decline to weakened expectations for business conditions and profit margins, with those sub-indices falling 5 points each to 36.6 and 34.1, respectively.
The "Global Economy" sub-index has now dropped for three consecutive quarters, falling a cumulative 15.6 points since late 2024, amid concerns over U.S. monetary policy, tariffs, and sluggish global demand.
Despite the downturn in sentiment, SMEs in certain sectors continued to show resilience. The construction industry index rose to 42.3, buoyed by ongoing government infrastructure projects such as the Kai Tak Sports Park.
Similarly, the accommodation and food services sector saw modest gains driven by tourism events and international concerts. Investment sentiment in the manufacturing sector reached a seven-year high, reflecting renewed focus on business expansion and R&D.
HKPC noted that 92% of surveyed SMEs intend to maintain or increase investment this quarter, prioritising areas such as IT systems, e-commerce training, equipment upgrades, and digital marketing. Pressure from rising raw material and salary costs also eased slightly, providing some relief for operational planning.
Thematic findings from the report also pointed to growing interest in international expansion. Whilst only 16% of SMEs plan to go global in the next three years, another 18% are considering it. Among these, the Mainland and Asian markets were the top targets, though concerns remain over unfamiliar local regulations and challenges in securing business partners.
Source: https://hongkongbusiness.hk/news/hong-kong-sme-index-hits-3-year-low-weak-profit-outlook