Pessimism over Hong Kong's operating environment in the three months to April would curtail any large investments by small and medium-sized enterprises (SMEs), according to the latest survey by the Hong Kong Productivity Council. The quarterly survey polled more than 500 SMEs for their views on market opportunities, the financial and investment situation, operating costs, human resources and risk assessment in the SAR. Of those polled, a majority were from the service sector, with the rest in manufacturing. Council general manager Vincent Li Kai-lun said: 'The survey has shown SMEs are generally forecasting a weakened operating environment compared with the last quarter.' Respondents felt there had been a significant drop in business opportunities, with the economy still sluggish. Respondents to the survey called for further reductions in labour and rental costs.