Hong Kong private sector growth slows in Sept despite strong services activity

S&P Global Hong Kong Purchasing Manager's Index - an indicator of the local private sector - dipped to 50.4 in September from 50.7 in August, marking the second month standing at expansion territory while indicating a slightly weak improvement in business conditions.

Data indicates that Hong Kong's overall business activity has expanded for two consecutive months, with the pace of growth reaching its highest level since December last year. This upward trend has been driven by the service sector, while the other three major industry sectors have recorded negative growth.

S&P noted that economic activity expanded slightly more than in the previous month, reaching its highest level since December last year, while new orders contracted modestly for the second consecutive month.

Respondent companies specifically highlighted that US tariff policies continued to impact order demand for exports to mainland China and globally; export orders in September recorded their sharpest decline since April 2022.

Looking ahead to the business outlook for the coming year, although firms remained pessimistic at the end of the third quarter, the gloom had noticeably faded compared to the previous month, with the relevant index reaching its highest level since December 2023.