(Yicai Global) May 9 -- China's Small and Medium Enterprise Development Index slumped for the second month running in April to remain below the benchmark of 100, indicating a lack of vitality, despite a good start to the country’s economy this year.

The SMEDI stood at 89 in April, 0.7 point higher than a year ago, according to data released by the China Association of Small and Medium Enterprises today.

Five of the eight sectors surveyed fell. The industrial index dipped 0.5 point, the transportation and logistics sector index by 0.5 point, the real estate index by 0.3 point, the social service sector index by 0.4 point and the information transmission and computer software sector index by 0.3 point.

But the construction sector index and the hospitality and catering sector index both rose, while the wholesale retail sector index remained unchanged.

Small and medium-sized enterprises are still facing a number of challenges, including surging costs and fewer orders, the association said. Global inflation is still high, developed economies are tightening their monetary policies, the world economy is showing a downward trend, and the environment is uncertain and unpredictable.

At home, the current improvement in China’s economy is mainly restorative and there is no strong internal driving force for demand, which means economic growth is facing resistance.

Editor: Kim Taylor