HONG KONG SAR - Media OutReach Newswire - 23 April 2026 – Hong Kong's small businesses delivered their strongest performance in a decade in 2025, while confidence in the year ahead has climbed to a record high, according to CPA Australia's latest Asia‑Pacific Small Business Survey 2025–26.

The survey shows that 68 per cent of Hong Kong SMEs recorded growth in 2025, up from 65 per cent in 2024 and marking the highest result on record. This positive momentum is expected to continue this year, with 71 per cent of SMEs expecting their businesses to grow and 76 per cent anticipating growth in the local economy — both at record highs. Customer loyalty and a strong workforce were identified as key drivers behind SMEs' solid performance last year.

Mr Cliff Ip, Councillor of CPA Australia's Greater China Divisional Council, said Hong Kong's improving business environment played a critical role in supporting SME growth. "Hong Kong's business confidence and economic growth strengthened last year, supported by robust capital markets, a recovery in tourism and consumption, and signs of stabilisation in the property market," said Mr Ip. "Against this stable and supportive backdrop, small businesses not only benefited from increased business activity, but were also able to expand in a healthy and sustainable manner."

Looking ahead, Mr Ip noted that while global geopolitical tensions and external uncertainties pose rising challenges, Hong Kong's underlying strengths remain a key advantage for SMEs. "Rising geopolitical risks are likely to create headwinds for many sectors such as trade and logistics through higher fuel costs and supply chain disruptions. However, I remain confident about Hong Kong's overall business outlook this year," he said. "As many regions become more unpredictable or less secure, Hong Kong's stable and consistent business environment, together with supportive policy settings including the city's low and simple tax regime stand out as important advantages in attracting international companies and investors."

Mr Ip added that these developments also present new opportunities for local SMEs, particularly as increased international interest creates scope to build partnerships, expand networks and tap into new markets. "This environment also creates favourable conditions for younger entrepreneurs to explore emerging markets and pursue new business opportunities," he said.

Improved business performance has strengthened the solvency of many local SMEs. The share of businesses reporting difficulty paying debts fell sharply from 22 per cent in 2024 to just 3 per cent in 2025, while only 4 per cent expect to face difficulties this year, down markedly from 26 per cent previously. As a result, Hong Kong small businesses are now the least likely among the surveyed businesses to report solvency concerns.

Mr Ip said, "The solvency of many SMEs has notably improved, driven by stronger cash flow from improved business growth, a robust capital market and a recovering property market over the past year. This healthier cashflow has both supported easier access to external finance and reduced the need for such finance."

Hong Kong SMEs have also strengthened their capability to invest in technology that delivers rapid improvements in profitability. In 2025, 64 per cent of SMEs reported that their technology investment in that year helped improve profitability, up from 59 per cent in 2024. Two in five Hong Kong SMEs invested in artificial intelligence (AI) last year, making it the leading technology investment among local SMEs, followed by customer relationship management (CRM) software.

At the same time, cyber protection has improved, with the share of Hong Kong businesses reporting losses from cyber incidents falling sharply from 72 per cent in 2024 to 43 per cent in 2025. However, as digitalisation accelerates, cyber risks remain elevated, with nearly three in five SMEs expecting to face cyber threats this year, above the survey average 42 per cent.

Mr Davy Leung, Deputy Chairperson of CPA Australia's SME and Entrepreneurship Committee of Greater China, said the growing maturity and availability of AI tools is helping SMEs enhance productivity, reduce operating costs and improve customer experience.

"However, rising digital fraud, wider AI adoption and SMEs' increasing reliance on digital banking have prompted the Hong Kong Government to significantly strengthen banking security and cybersecurity resilience over the past year. This includes the rollout of low-cost and practical initiatives such as the Cybersec One Programme and the continued implementation of the '9+5' SME support measures. The decline of cyberattack-related losses reported in the survey in part reflects the effectiveness of these measures.

"As cybersecurity threats and digital fraud risks continue to escalate, SMEs should make better use of these available resources, including free website risk assessments and vulnerability identification services, to strengthen their defence capabilities and safeguard business operations."

Mr Leung also suggested that the Government consider revamping the Technology Voucher Programme to support broader digitalisation efforts, including the adoption of both AI and non-AI technologies. He added that enhanced training support would help SMEs identify and implement modern tools to drive innovation, improve efficiency and strengthen long-term competitiveness.

Rising costs remain a key challenge for Hong Kong SMEs in 2025, with 29 per cent reporting it having a negative impact on their business. However, this was the second‑lowest level among all surveyed markets, underscoring Hong Kong's relatively low inflationary environment last year. Notably, the share of SMEs citing staff costs as a negative factor rose from 35 per cent to 42 per cent, making it the most significant cost pressure for Hong Kong businesses in 2025. This increase may help explain why the proportion of SMEs hiring additional staff declined from 42 per cent to 38 per cent last year.

Mr Leung said, "Increasing costs remain a significant barrier for many SMEs across Asia‑Pacific region, but Hong Kong's relatively low inflation has helped cushion the impact on local small businesses," Mr Leung said.

Mr Leung added that while headcount growth has moderated, overall staff costs have continued to rise as businesses invest in higher‑value talent. "Greater digitalisation and automation have helped ease labour constraints in Hong Kong. When SMEs do add staff, they are increasingly recruiting employees with digital and AI capabilities, or creating new roles to support business transformation. These positions typically command higher salaries, which has contributed to higher overall staff costs despite slower hiring growth."

The annual survey collected the views of 4,166 small businesses across 11 Asia-Pacific markets, including Singapore, the Chinese Mainland, and Australia, with 305 respondents from Hong Kong.