Hong Kong's private sector activity expanded for the third consecutive month in October, with the S&P Global Purchasing Managers' Index rising to 51.2 from 50.4 in September, marking the highest reading in nearly a year and remaining above the 50-point threshold that separates expansion from contraction.
New orders received by private companies grew for the first time in nine months, driven by improved customer confidence and stabilized demand from both local and mainland Chinese markets, the report said.
While new export orders continued to decline due to global economic softness and U.S. trade tariffs, mainland China orders recorded their first increase in a year, helping offset weakness in overseas markets.
The improved sales led to the fastest expansion in business activity in a year, though backlogs of work decreased for the tenth consecutive month, indicating remaining spare capacity.
Usamah Bhatti, economist at S&P Global Market Intelligence, said in a research note that employment saw modest growth, while input costs rose significantly, prompting companies to increase selling prices at the sharpest rate in a year to protect margins.
