The main SMEI index rebounded to 50.4 in July thanks to a recovery in expectations and credit conditions. The performance sub-index remained in contraction territory for a second month due to the decline in services. Manufacturing activity accelerated, while the property, construction, financial, retail and catering sectors declined, say Standard Chartered economists Hunter Chan and Shuang Ding.
Services remain the main decline
“Our headline SMEI index rebounded to 50.4 in July from 49.9 in June, returning to expansionary territory after a single-month decline, largely thanks to improved credit expectations and conditions. Meanwhile, the performance sub-index remained below 50 for the second consecutive month at 49.7. Our growth momentum tracker fell further as the finished goods inventory sub-index rebounded more than new orders.”
“Manufacturing SMEs reported faster production activity and a rise in sales and new orders, lifting the manufacturing performance sub-index to 51.3 in July after falling to 49.8 in June. Meanwhile, labor-intensive industrial activity declined. External demand weakened as the new export orders index fell below 50.”
“The performance of services sub-index improved by just 0.3 points to 49.3 in July as sales fell further. The real estate, construction, retail and wholesale sectors remained the main decliners. Accommodation and catering SMEs again reported subdued sales and new orders. Credit and liquidity conditions for SMEs improved modestly as banks remained supportive and excess cash at SMEs increased.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
