SME Confidence Index shows slowing growth in January

SMEs likely to confront weaker growth trend in the first quarter, Standard Chartered Bank says in report.

Growth for small and medium Chinese enterprises slowed in January, Standard Chartered said, adding that they are slated to face more obstacles in the near future.

The Small and Medium Enterprise Confidence Index, released by the UK-based bank, fell to 53.8 points in January from 55.3 points in December 2017, while the SME growth momentum index also reversed from 11.2 points to 9.8 points.

The present situation index and expectation index also dipped, indicating that SMEs were likely to confront a weaker growth trend in the first quarter, the bank said in a report.

"The decrease in demand is dragging on production, and the willingness of SMEs to invest remains low," Shen Lan, economist of Standard Chartered China, said.

"The first quarter of 2018 is expected to see more obstacles including the decline of investment and production while stricter regulations will lead to slower growth in (China's) gross domestic product," Shen said.

The SME present situation index fell by 1.6 percentage points to 55.4 points in January compared to the previous month, led by weaker production, sales and employment at the same time.

The report also showed that the SME's expectation index dipped from 55.5 points to 54.0 points, with the financing expectation declining the most.

The drop in the confidence index for SMEs in January was attributed to rising financing costs, the report said.

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