Title: SMEI Rebounds to 50.4 in July, Manufacturing Activity Accelerates – Standard Chartered Economists
In July, the Small and Medium Enterprise Index (SMEI) saw a rebound to 50.4, marking a return to expansionary territory after a brief dip. The recovery was driven by improved expectations and credit conditions, according to economists Hunter Chan and Shuang Ding from Standard Chartered. However, the performance sub-index remained below 50 for the second consecutive month, with services continuing to drag down overall performance.
Manufacturing SMEs reported faster production activity, increased sales, and new orders, resulting in a rise in the manufacturing performance sub-index to 51.3. On the other hand, services saw only a slight improvement, with the performance sub-index inching up to 49.3 in July. Real estate, construction, retail, and catering sectors remained as key drags on the overall index.
Despite the challenges in certain sectors, credit and liquidity conditions for SMEs showed modest improvement, with banks remaining supportive and cash surplus at SMEs increasing. This data highlights the importance of monitoring different sectors within the SMEI to understand the overall economic landscape and make informed investment decisions.