DBS survey: more than half of Hong Kong SMEs express neutral sentiment for economic outlook and cite consistent cashflow and cost management as top business priority

Expressing a neutral sentiment towards the 2024 economic outlookAccording to the survey, more than half of the respondents express a neutral forecast for the economic outlook of Hong Kong (55.6%) and Mainland China (50.8%), while being slightly more optimistic on the economic outlook of Mainland China (27.3%) than Hong Kong’s (20.6%).Almost half of the Hong Kong SMEs (49.7%) anticipate growth in their business revenue over the next twelve months, where 28.1% of the surveyed SMEs expect the business to remain stable. To support their expansion and business priorities, DBS is committed to providing digital banking services tailored to the needs of these SMEs.Ensuring consistent cashflow and managing costs ranked top priorityWhile the previous year's survey indicated that marketing and branding were the top priorities for Hong Kong SMEs, this year's survey shows a shift in focus. The top business priorities amongst respondents are now “ensuring consistent cashflow and managing costs” (71%), market expansion (52.4%) and marketing and branding (35.6%).In particular, there has been a significant increase in the number of Hong Kong SMEs considering market expansion as one of their top business priorities, more than doubling from 25% last year to 52.4% this year. Mainland China (55.1%) emerges as the top priority market for Hong Kong SMEs, where 38% expressed their interests in Greater Bay Area cities in Mainland China, then followed by ASEAN (29.7%) and Europe (28.9%). Singapore specifically leads within the ASEAN region at 15.8%. With a robust network spanning 19 markets in Asia, DBS can help support SMEs to further expand in the region.The upcoming Budget announcement holds promise for Hong Kong SMEs, with 59.9% of respondents expects to receive increased funding or financial support. Business matching and networking (31%) and brand development (24.9%) follow closely. Furthermore, the survey reveals that 20.1% of respondents hope to receive government support to expand into the Greater Bay Area (GBA).Jolynn Wong, Managing Director and Head of SME Banking, DBS Bank (Hong Kong) Limited, said, “It is encouraging to see that almost half of the Hong Kong SMEs anticipate growth in their business revenue over the next twelve months. This reflects the resilience among the SMEs in Hong Kong and their confidence in the Mainland China and ASEAN markets. The survey also indicates that ensuring consistent cashflow and managing cost are of the top priorities for Hong Kong SMEs. At DBS, we have developed a whole suite of digital banking solutions and offers that help SMEs enhance their productivity and reduce costs. Together with our extensive network across Asia, we can unlock new opportunities for our SMEs to expand and optimize their supply chain in the region.”The survey also reveals that geopolitical uncertainties become the top concern amongst Hong Kong SMEs, with more than half of the respondents (53.5%) citing it as their top concern. Inflation (41.4%) and labor cost and availability (39.8%) also rank high on the list. Fewer SMEs (30.7%) identify rising global interest rates as their key concern compared with last year.The DBS SME Pulse Check Survey interviewed 374 Hong Kong SME representatives under DBS BusinessClass between 18 January to 1 February 2024. It aims to provide local insights into the sentiments and priorities of Hong Kong SMEs, shedding light on their economic outlook, growth expectations and concerns, and their views towards the upcoming 2024/25 Hong Kong Budget announcement on 28 February 2024.DBS BusinessClass is an engagement program designed for SMEs. This is a community program that helps SMEs grow their business and network across the region, receive the latest market trends and gain access to a knowledgeable community of Asia's business masterminds.[End]