Small businesses across Asia expect good times ahead.
They are especially upbeat about the economic outlook of India, Singapore, China and Indonesia, according to a survey commissioned by The Hongkong and Shanghai Banking Corporation (HSBC).
The firms were asked about their local economic outlook, whether they plan to invest and recruit, as well as their views on trade volumes with China, the rest of Asia and the world.
The HSBC Asia-Pacific Small Business Confidence Survey by The Nielsen Company was conducted in the first quarter of 2007 and covered 1,800 small and medium-sized enterprises (SMEs) across nine countries and territories: Hong Kong, China, Taiwan, Singapore, India, South Korea, Malaysia, Indonesia and Australia.
"This survey showed that an overwhelming number of respondents are positive about the economic outlook of their economy and trade volumes ahead and are willing to invest in their business as well as recruit more staff. This bodes well for the global economy as SMEs are the backbone of economies both in Asia and the rest of the world,'' said Ms Margaret Leung, Global Co-head of Commercial Banking at HSBC.
SMEs in India, Singapore, China and Indonesia, are most optimistic about the economic outlook, the survey showed.
In Hongkong, 71 per cent of the SMEs expect the economy to grow at the same pace (19%), moderately faster (27%) or significantly faster (25%) than the economic growth rate in the first quarter of 2007.
In terms of investment expectations, Indonesian SMEs are the most optimistic about investing to expand their businesses, followed by SMEs in China, Australia and Singapore.
However, the majority of Hong Kong SMEs (63%) have no plans to invest, while 27 per cent plan to invest and 11 per cent expect to reduce investment or cut production in the year.
As for recruitment expectations, SMEs in China are the most optimistic about recruiting more workers, followed by Indonesia, India and Singapore.
The majority of Hong Kong SMEs (73%) do not plan to change their headcount in the year.
On trade outlook, China and rest of Asia Small businesses that engage in cross-border trade were asked about their expectations of trade volumes with mainland China, rest of Asia and the rest of the world.
SMEs in India, Singapore and Indonesia are the most optimistic about growing trade with mainland China and rest of the Asia. Hong Kong SMEs are generally optimistic, with 19 per cent expecting moderate growth, and 37 per cent expecting significant growth. Only a small minority (12%) expect reduced trade with mainland China.
In terms of trade with the rest of Asia, 20 per cent expect trade with the rest of the region to pick up moderately and 19 per cent expect trade with the rest of region to grow significantly.
SMEs in India are also among the most optimistic about growing trade with the rest of the world, along with SMEs in Korea and Malaysia. Hong Kong SMEs are generally positive about the trade outlook with the rest of the world with 25 per cent expecting moderate growth and 18 per cent expecting significant growth.
