BEIJING - China's Small and Medium Enterprises (SMEs) Development Index, based on a survey of 3,000 SMEs, edged down 0.1 points from the previous month to 88.9 in May, the latest industry data showed.

This marked the third consecutive month of declines for the gauge, but the drop in May was narrower compared with the 0.3-point decrease in April, said the China Association of Small and Medium Enterprises.

The Chinese economy has sustained its recovery momentum, but the foundation remains unsteady, the association said, cautioning that uncertain and unpredictable factors are on the rise globally.

Businesses have been faced with flagging domestic demand and difficulties in production and operations, and smaller enterprises have been confronted with greater challenges, it said.

The industry group called for efforts to optimize the business environment, further anchor public expectations and boost market vitality. Measures should be taken to address problems faced by enterprises and ensure the solid implementation of supportive policies, it said.