Business sentiment among Hong Kong's small and medium-sized enterprises improved during the second month of 2026.

The current diffusion index on business receipts amongst SMEs rose to 45.3 in February from 43.4 in January, data released by the city's Census and Statistics Department on Tuesday showed.

The outlook index for March stood at 47.6. Readings above 50 indicate expansion, while those below signal contraction.

A government spokesman said business sentiment improved in February, with both the current and outlook diffusion indices rising to near two-year highs.

According to the spokesman, local business sentiment will be supported by the sustained expansion of the economy.

"The government will closely monitor the evolving external environment, including the developments surrounding the heightened geopolitical tensions in the Middle East and the frequently shifting trade and economic policies of major economies," the spokesman said in a statement.