HKPC Releases Q4 2026 SME Leading Business Index

The Hong Kong Productivity Council (HKPC) today announced the Standard Chartered SME Index for Q4 2026. According to the survey results, the overall index reached 44.8, an increase of 0.7 from the previous quarter, indicating improved confidence among SMEs regarding business and profit prospects.

Index Recovery and Industry Performance

Among the five component sub-indices, the "Business Conditions" and "Profit Margin" indices rose to 42.3 and 39.9, respectively, both reaching their highest levels this year. Notably, in the "Accommodation and Food Services" sector, these two sub-indices saw significant increases of 11.7. The "Retail" sector also showed improvement, with increases of 5.8 and 5.3.

Additionally, the "Investment Sentiment" index slightly rose to 50.8, remaining above the neutral line of 50; the "Recruitment Sentiment" remained stable at 50.1, while the "Global Economy" index fell to 31.5, indicating that SMEs remain cautious about external economic prospects.

Cost and Price Expectations

The survey also revealed that the proportion of SMEs expecting rising raw material costs has decreased for the second consecutive quarter, dropping by 11 percentage points to 53%. The percentage anticipating increases in employee salaries also fell by 3 percentage points to 14%, suggesting some relief in cost and wage pressures. Approximately 20% of SMEs plan to raise the prices of their products or services, an increase of 1 percentage point from the previous quarter, remaining overall stable.

Cross-Border Business Development and Digitalization Plans

This quarter's thematic survey explored the views and plans of Hong Kong SMEs regarding cross-border business development. The results indicated that about one-third (32%) of the surveyed SMEs are currently engaged in cross-border business or plan to expand their cross-border operations within the next year, with the highest proportion in the "Manufacturing" sector.

In summary, although the overall sentiment among SMEs remains cautious, confidence in the future has strengthened with the recovery of business conditions and profit margins.