Small and medium enterprises (SMEs) are facing a gloomy outlook, with nearly 10% of the interviewed local firms set to close their business, according to a survey conducted by the Federal General Commercial Association of Macau Small and Medium Enterprises.
In the “2022 Macao SME Business Index Confidence Survey,” the association surveyed some 500 SMEs, of which more than 85% responded that their business’ revenue has decreased by nearly half compared to pre-pandemic times.
This is in addition to the series of hurdles the city has faced, which has affected local businesses, such as the steep downturn in gaming revenues, global economic turndown and negative external factors and policy controls. Not to mention the fact that the operating costs of Macau SMEs, including rent and human resources, have risen sharply.
Executive vice president of the association, Melinda Chan, pointed out that the SMEs’ business confidence index stands at only 30 points, far below the 100-point base line.
According to Chan, the government is aware of the increasing turmoil SMEs are facing, referencing the fact that the government has proposed a series of measures to alleviate the burden of these firms. However, she said, these are non-sustainable short-term measures, which can only solve the pressing needs of the moment.
She then called on the government for development policies capable of boosting revenue for local SMEs.
Meanwhile, 31.5% of the surveyed SMEs have laid off staff due to the pandemic, among which 53.7% of the tourism and entertainment industry had laid off staff and 48% of the MICE and cultural sector had laid off staff.
A survey from the Statistics and Census Service (DSEC) has shown that both the general unemployment rate and the unemployment rate of local residents for the three-month period between December 2021 and February 2022 has continued to grow by 0.1%, reaching 3.3% and 4.3% respectively as at the end of February.
The total labor force living in Macau is 386,300, with a labor force participation rate of 69.3%.
Meanwhile, 32.1% of the surveyed SMEs believed that the Hengqin Cooperation Zone would have a positive impact on their businesses, and 53.4% expressed their hope to relocate their businesses to Hengqin.
However, only about 7.7% of the companies are able to implement a plan to move or expand in the nearby region, reflecting that local SMEs are keen on establishing a firm in the neighboring region, yet are lacking a concrete direction or plan.
Just recently, Macau investors began setting up companies in the Guangdong-Macau In-Depth Cooperation Zone in Hengqin without leaving their locality.
A “cross-border handling” mechanism for commercial registration was recently launched by the Cooperation Zone’s Commercial Services Bureau and the Macao Trade & Investment Promotion Institute.
Recently, the Macau Economic Association (MEA) has forecast that the Prosperity Index for March to June will likely fly low.
The projected values for the Index for these months are estimated to range between 2.5 and 2.7 points, on a scale of 0 to 7 points.
