Moderation in April – Standard Chartered

Headline SMEI retreated to 50.4 in April as all key sub-indices edged down from March. IT and transport services performance sub-indices fell below 50; manufacturing SMEs outperformed. Credit conditions remained steady, but not more favourable; exchange rate expectations were more stable, Standard Chartered’s note.

Tariff impact appears limited for now

“Our proprietary Small and Medium Enterprise Confidence Index (SMEI; Bloomberg: SCCNSMEI ) returned to the February reading of 50.4 in April after jumping to 51.2 in March. While the performance and expectations sub-indices edged down by 0.9pts and 1pt, respectively, from March, both stayed in expansionary territory, indicating still-steady growth and a stable outlook.”

“Manufacturing SMEs outperformed on steady growth in sales, production, new orders and new export orders, despite heightened bilaterial tariffs imposed by both China and the US. The US’ 90-day pause on non-China reciprocal tariffs may have supported front-loaded activity. In contrast, the performance index for non-manufacturing SMEs fell marginally below 50 again, after rising sharply in the previous month. Sales and new orders remained relatively stable, but labour usage, investment and profitability for non-manufacturing SMEs declined versus March. Real estate and construction activity picked up entering Q2, while that of IT and transport performance softened.” 

“The credit sub-indices edged down further to 50 in April, the lowest reading since August 2024, suggesting a stable credit environment for SMEs. Banks appear to have remained supportive to SMEs, albeit without further improvement. Funding costs for SMEs borrowing from non-bank financial institutions (NBFIs) fell again. Interestingly, c.97% of the surveyed SMEs expect a stable USD-CNY in the coming three months.”