(Yicai Global) April 26 -- The China Small and Medium Enterprise Confidence Index, a gauge of activity and confidence among non-big Chinese firms compiled by British bank Standard Chartered, slid slightly in April but remained in positive territory for the third straight month.

The China SMEI dropped to 53.3 this month from 53.7 in March, the London-headquartered lender's Chinese arm said in a press release yesterday. The index is based on monthly surveys of more than 600 companies in China and a figure above 50 signals expansion.

The sub-indexes of performance, expectation, and credit declined slightly to 52.9, 53.9, and 53.1 respectively, indicating that economic recovery gained ground slower.

Manufacturing accelerated, but growth in the service sector got slightly weaker. Supported by solid demand, the index for manufacturing production and sales climbed to a 16-month high of 59.7. The gauge for new export orders rebounded strongly to 55.1 from 48.4.

The service business performance index of SMEs in different sectors remained in positive territory, indicating stable momentum. In the service sector, hospitality and catering improved significantly after shrinking in March. The transportation sector continued to be strong, while growth in the real estate and information technology sectors slowed.

The SME credit index fell slightly to 53.1 in April from 53.6 in March. The indicator of credit dropped by 3.2 percentage points to 59.2, showing that banks still offer credit services to SMEs even though the financing costs are gradually increasing.

Still, SMEs reported stable liquidity. The accounts receivable turnover index remained above 50 for the third consecutive month.

Firms also gave their predictions about exchange rates. The proportion of surveyed SMEs expecting the Chinese yuan to be basically stable against the US dollar in the next three months rose by 3 percentage points to 77 percent. The share of those expecting the Chinese yuan to depreciate was down by 4 percentage points to 8.9 percent. About 92 percent of the polled firms said that the impact of exchange rate fluctuations on their costs in April has been negligible.

Editor: Emmi Laine, Xiao Yi