SME performance weaker in June: StanChart

By Leng Cheng | June 30, 2015, Tuesday |

Online Edition

China's small and medium-sized enterprises posted a weaker performance in June as manufacturing activities softened after a cooling economy and credit conditions improved less, a survey report said today.

China's Small and Medium Enterprise Confidence Index, a monthly measure of small business sentiment, fell to 57.3 in June from 58.2 in May, posting a consecutive third month decline, Standard Chartered Bank said in a report today.

All three sub-indices fell in June. The current performance sub-index, composed mainly by production and new orders, dropped to 55.8 from 56.5 in May. The credit conditions sub-index, which reflect banks' attitude towards lending SMEs, declined to 55.2 from 56.9. While business expectations sub-index also shrank to 60.8 from 61.2, according to the bank.

"Economic growth momentum remained weak in the second quarter as it weighed down by slowing investment,” told Shen Lan, an economic researcher at Standard Chartered.

"Sluggish domestic demand appears to have continued to constrain SME activity," Shen added.

With gross domestic product growth expected to decelerate further from 7 percent to 6.7 percent year on year in the second quarter, the bank said, government might continue its monetary easing policy and cut another 100 basis points of reserve requirement ratio by year end to encourage bank lending to SMEs.

The research was based on bank's survey of nearly 600 SMEs nationwide, and a reading of 50 divides optimism from pessimism.

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SME performance weaker in June: StanChart

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