Hong Kong’s private sector conditions deteriorated for the first time in six months in February, weighed down by weakened demand both domestically and externally and lower business sentiment, according to S&P Global.

S&P Global Hong Kong SAR Purchasing Manager’s Index – a composite single-figured indicator of performance – fell to 49 in February from 51 in January, the first time below the 50.0 neutral mark since August. A reading below 50 indicates contraction in the sector.

Business activity in Hong Kong’s private sector contracted for the first time in five months, in line with a decline in new orders, amid a subdued economic backdrop, rising costs, and concerns over the impact of US tariffs, S&P Global analysts said in a statement.

"Forward-looking indicators, including new orders and future activity indices, hinted at the contraction deepening in the coming months," said Pan Jingyi, economics associate director at S&P Global Market Intelligence.

"The sinking of overall business confidence to the lowest level in one-and-a-half years calls for greater policy support to stem further declines in sentiment. Weak business sentiment contributed not only to the lowering of staffing and purchasing levels, but also limited firms' ability to price in the past few months, thereby affecting margins."

STAFF REPORTER

Business activity in Hong Kong’s private sector contracted for the first time in five months, S&P Global analysts said. SING TAO

PMI falls, private sector showing signs of contraction