Small and medium-sized enterprises (SMEs) are anticipating a worsening business environment for the first time in 16 months in the wake of last month's terrorists attacks in the United States. A survey by the Hong Kong Productivity Council yesterday showed a decline of 3.4 per cent in the business operating environment index. The index, which reflects the level of confidence in that segment of the Hong Kong business community, recorded a 2 per cent growth before the incident. The level is a far cry from the second quarter's 7.5 per cent. 'It is the first time in the past 18 months we have reported a negative score,' said Vincent Li Kai-lun, the general manager of the council. The survey is the first by Hong Kong to assess the impact on the local SMEs sector - with 516 interviewed before the attacks and a further 502 afterwards. The quarterly survey revealed its measure for risk assessment tumbled to minus 38.6 per cent after the attacks, from minus 23.3 per cent before. By comparison, the measure was a negative 4.5 per cent in the second quarter. The market opportunity index also recorded a drastic decrease of 29 per cent to minus 51.67 per cent in the wake of the terrorist attacks. SME interviewees are worried about a sluggish global economy and market uncertainty in the coming quarter. Garment, retail and wholesale businesses are expected to be most affected. In anticipation of a deteriorating economy, 26 per cent of the SMEs interviewed after the attack expect they may lose money and another 38 per cent see flat business growth in the coming 12 months .
