A quarter of SMEs in Asia to hire additional staff in next six months

PUBLISHED : Thursday, 22 July, 2010, 12:00am
UPDATED : Thursday, 22 July, 2010, 12:00am

HSBC said about a quarter of small and medium-sized enterprises (SMEs) in Asia plan to recruit more staff in the next six months, based on a global survey of 6,346 interviewees.

Shaun Wallis, HSBC's global head of business management, said SMEs were a huge and expanding sector for the bank. HSBC has granted more than HK$27.4 billion in loans to 8,900 small and medium-sized enterprises in Hong Kong since the launch of its SME loan fund in December 2008.

Among SMEs in Asia, 24 per cent plan to recruit more staff and 39 per cent plan to increase capital expenditure in the next six months, the survey says.

Hong Kong businesses are showing steady signs of recovery, with 53 per cent of SMEs surveyed planning to maintain current levels of investments, and 29 per cent saying they will raise capital expenditure.

In Hong Kong, 10 per cent of SMEs plan to increase their workforce and 89 per cent will maintain staffing levels over the next six months.

On the mainland, 42 per cent of SMES in the survey say they plan to increase capital expenditure.

Globally, SMEs in Turkey, North America and Middle East show the strongest jump in confidence levels. Most markets show confidence is rising, but the level in India fell 11 points.

Wallis said Indian SMEs realised that the economic growth was stabilising, and had readjusted their confidence level. In Turkey, a high economic recovery and growth took place in the first half this year, leading to a rise in confidence levels, he said.

HSBC had three times as many deposits as loans within the global SME sector - a reflection of the nature of SME businesses, he said.

'SMEs do not tend to borrow as much as the public perception is. Our survey shows most small businesses are not heavily geared; they are focused on cash management.'

As for changes brought by the appreciation in the yuan, the survey shows that the number of SMEs holding a yuan account in Hong Kong will rise 19 per cent to 48 per cent within the next 12 months.

'We are migrating our product range into [yuan], as more consumers and more SMEs want to have yuan products,' Wallis said.

'We will increasingly see yuan becoming the settlement currency in trade in Asia.'

HSBC's yuan trade settlement volume grew to more than 1.6 billion yuan (HK$1.8 billion) in May, three times the volume in April, Wallis said.