Confidence among small and medium-sized businesses in Hong Kong has returned to its highest level since last September after plummeting during the Sars outbreak, according to a survey by the Hong Kong Productivity Council.
In the council's quarterly study of the business operating environment for such firms, the overall index has risen by 15 percentage points to 3.4 points above zero.
'Clearly, local SMEs are more optimistic about their prospects for the third quarter [July to September] as gloomy economic sentiment related to the Sars outbreak has dissipated,' the council said. Manufacturers are more confident than service companies although both types of businesses had experienced a major rebound in outlook, said the council, a government-funded agency.
The confidence index for manufacturers rose to 7.4 points while the index for the service sector rose to 0.2 points.
Clothing and textile makers, manufacturers of plastics, electronics and electrical appliances and trading companies are particularly confident of their business prospects, the council said.
It polled 349 service-sector companies and 276 manufacturers and subtracted the percentage of negative companies from positive ones to come up with its indices.
The results track the effect that Sars had on Hong Kong's economy, with tourism, retail and hospitality companies affected much harder than others.
Yesterday, the government said the number of foreign companies registering a business in Hong Kong for the first time rose to 364 in the first six months of the year, 9.3 per cent higher than the same period last year. By the end of June, there were 6,858 overseas companies registered in the city, 2.2 per cent more than at the end of last year.