The index tracking domestic managers' business confidence dropped by 17.1 points in the past three months, after hitting a record high of 132.5 points in the first quarter.

The severe acute respiratory syndrome epidemic dampened businessmen's outlook in the accommodation, service and logistic industries. Restaurant managers, who saw the greatest plunge in their sales, reported a 79.4-point drop.

"Fortunately, pessimism in the hotel and restaurant sectors is easy to overcome as no SARS case has been reported recently," said Chen Jianhao, researcher of Shanghai Academy of Social Sciences. "These industries are just experiencing a short-term set-back."

Real estate developers and construction companies, which would take much longer time to recover if hit hard, seemed to have survived SARS during the past three months.

Their confidence index declined merely 1.8 and 3.6 points, respectively.

"The real estate projects have long developing and sales period, which are unlikely to be hurt by temporary turmoils like SARS," said Zhou Zhicheng, general manager of Shanghai Jiande Real Estate Development Co Ltd.

"The SARS epidemic also reminded people to seek healthy living conditions, including well-ventilated apartments or even villas," Zhou said.

The strong will of property developers also pushed up the index tracking total investment confidence. The index, which rose 8.7 points during the period, was also supported by the government's heavy spending on infrastructure projects.

To offset the negative impact of SARS, the government has brought forward some infrastructure construction projects planned in the next two years to this year.

Small- and medium-sized company managers were more affected by the SARS turmoil, the bureau said.

(eastday.com July 5, 2003)