HK's PMI rises as restrictions eased

Business | Avery Chen 7 Jul 2020

Business conditions in Hong Kong moved closer to stability last month.

That was seen in IHS Markit's Hong Kong purchasing managers index rising 5.7 points month-on-month to 49.6 thanks to the relaxation of Covid-19 containment measures.

The figure was the highest since a downturn began in April 2018, indicating that private-sector conditions are approaching stabilization, the London-based information provider said. But it is still below 50, representing an overall decrease.

Business activity and new orders declined at the slowest rates since the first half of 2018 - before the escalation of the US-China trade tensions.

Private-sector employment levels also stabilized, with firms increasing their purchasing activity for the first time in over two years, said Bernard Aw, principal economist at IHS Markit. But local business sentiment remained negative, reflecting concerns about the long-term economic impact of the pandemic.

In addition, the survey indicated that Hong Kong's new export business fell at a marked pace, led by a substantial decline in orders from the mainland.

"The potential of a robust recovery in the Hong Kong economy relies on the strength of the upturn in the global economy in the coming months," Aw noted.

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