(Yicai Global) July 8 -- The China Small and Medium Enterprises Development Index, which assesses the operational health of the country’s small and medium-sized businesses, gained in June, ending four straight months of contraction as the recent resurgence of Covid-19 comes under control, more companies get back to business and supportive policies come into effect.

The index edged up 0.2 point in June from May to 88.4, according to a report by the China Association of Small and Medium Enterprises released today. But the index is still lower than the same time last year.

Seven out of eight sub-indexes climbed, with only the costs sub-index remaining the same as in May, and all eight sub-industries improved, indicating that small and medium companies are bouncing back, said Xie Ji, secretary-general of the association. It is the first time since March last year that none of the gauges slipped.

Of the sub-industries, the accommodation and catering sector performed the best, advancing by 0.6 percentage point to stand at 80.7. Construction, transportation, warehousing and retailing gained for the second consecutive month. All readings, though, were below the benchmark of 100 which indicates profitability. The figure for accommodation and catering was the lowest, while that for industries was the highest at 88.6.

The macro-economic perception sub-index that reflects corporate confidence gained 0.2 percentage point month on month to 97, rising for the first time in four months as companies’ confidence returns.

The capital sub-index was 100.9, nudging up 0.1 percentage point from May as financing tensions ease. The labor force sub-index also edged up 0.1 point to 105.5. And the supply sub-index grew by 0.2 point to 113.7, as new graduates entering the work force boost supplies.

The business returns sub-index did the best, growing by 0.5 percentage point. The demand sub-index was 97.3, same as in May, as some firms have yet to fully resume production and operations, while the costs sub-index was flat with the month before at 113.7, indicating that costs are still on the rise.

Editor: Kim Taylor