The Hong Kong Productivity Council on Monday released the Standard Chartered Hong Kong SME Leading Business Index for the fourth quarter of 2025. The composite business index hit its highest level of the whole year, indicating a notable recovery in small and medium-sized enterprises' confidence in the business environment.
The composite business index for the fourth quarter reached 44.5, up 4 points from the previous quarter. All five component indices recorded growth, with the “global economy” ending three consecutive quarters of decline by surging 12 points in the last quarter, returning close to levels seen in the fourth quarter of 2024. The “profit margin” and “business condition” rose by 4.9 and 4.0 points respectively, while “recruitment intention” and “investment intention” also saw modest increases. Notably, the “investment intention” broke through the 50-point neutral mark for the first time since the third quarter of 2023.
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Of the 11 industries tracked by the HKPC, all 10 industries posted gains except construction, which dipped slightly. Significant increases were recorded in real estate; finance and insurance; transport, warehouse and courier services; and retail.
However, import/export trade and wholesale, together with transport, warehouse and courier services, remained at the lower end of the industry rankings. Hunter Chan, economist for Greater China at Standard Chartered, said that although ongoing Sino-US trade talks had eased tensions during the survey period, renewed disputes over rare earths and shipping in October indicated that trade uncertainties persist and will continue to weigh on SME confidence.
He added that prudent communication between the two sides would help boost SME confidence. Chan also projected two interest rate cuts by the US Federal Reserve within the year.
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On investment trends, 95 percent of surveyed SMEs said they will maintain or increase investment this quarter, up 3 percentage points from the previous quarter. Among them, 6 percent planned to raise investment.
Corporate expansion overseas will continue, and companies can mitigate risks — including those arising from relatively unstable tariffs — by diversifying business operations across regions and adjusting their supply chains, Chan said.
China's National Bureau of Statistics on Monday reported that the mainland's third-quarter GDP grew 4.8 percent year-on-year, matching market expectations. Chan said that amid lingering external uncertainties, the Chinese mainland's economic growth was expected to provide positive support for Hong Kong's economy. In the survey, nearly 60 percent of respondent SMEs expressed interest in expanding into the mainland market within the next year.
Chan noted that the Chinese mainland's upcoming 15th Five-Year Plan will continue to focus on innovation, digitalization and green, low-carbon development, adding that Hong Kong could provide high-value services and professional advice in these areas to foster mutual economic growth.
Contact the writer at akirawang@chinadailyhk.com
