This Dec 10, 2021 photo shows a man riding a bicycle past a retail store in Sheung Shui, a town in northwest Hong Kong. BERTHA WANG AFP Business confidence of small and medium-sized businesses in Hong Kong weakened in July due to the deteriorating external environment and the increase in local COVID 19 infections, according to a survey released on Tuesday.
According to the monthly survey by the Census and Statistics Department, the diffusion index on business receipts for SMEs decreased from 46.3 in June to 43.4 in July.
The majority of the surveyed sectors' sub-indices declined compared with the previous month. The index for real estate fell from 48.2 to 42.5 and the index for import and export trades went down from 46.3 to 41.1.
The current diffusion index on new orders for import and export trades decreased by 4.3 points to 43.1 in July.
A reading above 50 indicates a favorable business condition, while a reading below 50 suggests otherwise.
The survey expects the diffusion index to pick up in August, with the index for business receipts and new orders climbing to 48 and 46.9 respectively.
A government spokeswoman said that the worsening of global economic prospects and the stepping up of monetary policy tightening by major central banks will continue to put pressure on business sentiment, especially the externally-oriented sectors. The second round of consumption vouchers will give support to the consumption-related sectors, but their business situation will depend on the city's COVID 19 development and financial conditions, the spokesperson said.
On Tuesday, Hong Kong reported 4,045 coronaviruses and three more deaths. The overall caseload reached 1,393, 327 and the number of related deaths was 9,550.
Employment sentiment decreased from 49.8 to 49 in July, from a month earlier, with the current diffusion index on employment falling from 49.8 to 49.8 in July.
The survey covers 600 SMEs with less than 50 employees. The data was collected in the last week of July.