Hong Kong's small and medium-sized businesses became slightly more confident about their outlook in the third quarter, though concerns about business conditions and profitability persist.

The Standard Chartered Hong Kong SME Leading Business Index rose 0.8 point from the previous quarter to 44.1, according to a survey released by the Hong Kong Productivity Council on Thursday.

A reading below 50 indicates negative sentiment.

"The improvement in our 'Standard Chartered SME Index' for Q3 was largely due to the easing in concerns over geopolitics following the US-Iran ceasefire since April and the decline in global oil prices towards pre-conflict levels," Standard Chartered economist Tommy Wu said in a statement.

The global economy sub-index recorded the strongest improvement, rising 12.2 points to 33.1 and returning to its fourth-quarter 2025 level. Import-export trade and wholesale businesses posted a 15.6-point increase, while professional and business services rose 15.3 points.

Recruitment sentiment stood at 50.5 and investment sentiment was at the neutral level of 50. Business conditions and profit margins remained below that threshold at 40.5 and 37.8, respectively.