Coronavirus: China small business confidence edges up, but still weak as pandemic impact lingers

A survey of small private businesses in China showed sentiment approved modestly in March, but it is still pessimistic overall

Sales expectations edged up, while firms’ outlook for profits remain depressed, indicating business conditions are still bad as the impact of coronavirus lingers

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China’s small businesses are still suffering despite the removal of lockdowns and travel restrictions. Photo: Xinhua

Published: 5:15pm, 27 Mar 2020Updated: 5:43pm, 27 Mar 2020

Business confidence among small and medium-sized enterprises in China improved modestly in March, but remained gloomy overall as the removal of lockdowns and travel restrictions led to only a marginal rebound in sales and investment.

The business conditions index developed by Cheung Kong Graduate School of Business (CKGSB), which surveys small and medium-sized firms in the private sector, rose to 41.3 in March after falling to 37.3 last month, the lowest level since the index was launched in 2011.

A reading below 50 indicates a majority of private businesses are pessimistic about current conditions, meaning sentiment still has a long way to recovery.

While the four components of the index – sales, profits, inventories, and financing – each improved slightly, by no means did they indicate the decline in economic activity in the first two months of the year had been reversed.

Sales expectations edged up to 41 this month, while firms’ outlook for profits remained depressed at 31, indicating business conditions are still bad, though not as grim as in February when China imposed draconian lockdowns to contain the spread of the virus.