HK business activity up; first rise since July
Hong Kong business activity grew last month, reversing a five-month contraction, as the strong employment market helped to underpin local consumption.
The Hong Kong purchasing managers' index (PMI) compiled by HSBC and Markit stood at 51.9 points in January. A reading above 50 denotes growth and anything below denotes contraction. It was the first positive figure since July.
The survey, which is compiled from interviews of about 300 companies from a variety of sectors including manufacturing, services, retail and construction, produced a reading of 49.7 points in December.
'Overall demand strengthened again in January to tip the headline PMI back above 50,' said Donna Kwok Ho-jong, HSBC Greater China economist.
'The sustained strength of Hong Kong's job market is clearly helping to underpin local consumption and offset the impact of still tepid mainland demand.'
'Slowing global trade flows will weigh upon growth this year, but this promising start to 2012 underscores our expectations for gross domestic product to stay in expansion mode this year,' Kwok said.
Among the sub-indices, business output expanded for the first time in six months to 51.7 points last month from 49.7 in December, the research said. The new orders sub-index soared to an eight-month high of 53.7 points in January, up from 50.4 over the previous month.
There was also a growth in new jobs for the first time in six months, with the relevant sub-index surged to 51.5 points in January.
Figures from the Census and Statistics Department showed that the city's jobless rate fell by 0.1 percentage points to 3.3 per cent for the period between October and December due to strong consumption demand from both tourists and locals.
However, HSBC's report also stated that new business inflows from the mainland contracted again for the third month, with a reading of 49.1 points.
'This supports our view that resilient domestic demand in Hong Kong is acting as a critical counterbalance against the impact of China's continued slowdown and ongoing turmoil in European and global financial markets,' the study said.
But Daniel Poon Wing-choi, assistant chief economist at the Hong Kong Trade Development Council, said an improved figure for a single month did not necessarily signify the start of a trend.
'There were many holidays in January and some companies might have boosted their output in advance before the holidays,' Poon said, adding that exports to tradition markets such as the US and Europe might weaken due to uncertainties in the global economies.
The mainland's official services PMI sank to 52.9 last month from 56 in December, according to the China Federation of Logistics and Purchasing which issues the data with the National Bureau of Statistics.
