Hopes rise as economy returns to growth

Business | Avery Chen 4 Mar 2021

Hong Kong economic activities returned to growth for the first time in three months in February, with the Purchasing Manager's Index rising to 50.2 from 47.8 in January, according to IHS Markit.

A reading above 50 indicates an expansion in the private sector economy from a month ago.

"With the latest wave of infections having subsided, an easing of restrictions underway and the vaccine roll-out in progress, there are now realistic hopes that the economy can return to growth in the near future, said Andrew Harker, economics director at IHS Markit.

Output had dropped in 35 successive months, but the latest fall was the softest since last November. New orders also fell but at much slower rates than in the previous two months, the survey showed.

Local companies expressed optimism regarding the 12-month outlook for business activities for the first time since January 2018 thanks to the falling Covid-19 case and vaccination campaign.

Although muted, the level of positive sentiment in February was the highest since September 2014, IHS Markit said.

However, purchase cost inflation quickened for the third month running and was the fastest since July 2018, due to higher raw material prices.

In contrast, staff costs continued to fall slightly.

Facing competitive pressures and requests for discounts from customers, selling prices decreased for the 20th straight month.



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