Overall business sentiment among small and medium-sized enterprises in the Hong Kong Special Administrative Region improved slightly in July, according to an official monthly survey of SME business situation.

The current diffusion index on business receipts amongst SMEs increased from 41.6 in June in the contractionary zone to 42.1 in July, survey results released by the Census and Statistics Department showed on Monday.

A reading above 50 indicates that the business condition is generally favorable, whereas that below 50 suggests otherwise.

The outlook for the index on business receipts for August was 45.5, according to the results.

The current diffusion index on business receipts for many surveyed sectors, despite below the 50-mark, rose in July as compared with the previous month, particularly for the real estate (from 44.2 to 46.2) and business services (from 43.5 to 44.8), the department’s data showed.

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The survey results also indicated that the index on new orders for the import and export trades remained at 45.0 in July, whereas the outlook for the index on new orders in August was 47.0.

A spokesperson for the HKSAR government said business sentiment among SMEs and their outlook in one month's time both improved slightly in July.

Meanwhile, the overall employment situation remained largely stable, the spokesperson added.

Stressing that the elevated uncertainties in the external environment would continue to affect the local business sentiment, the spokesperson pointed out that the resilient local economy and steady economic growth in Asia, particularly on the Chinese mainland, should provide support.

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The survey was based on the views collected from around 600 SMEs in selected sectors in Hong Kong, covering wholesale trade, retail trade, import and export trades, restaurants, logistics, real estate, and business services.