Business activity stops slowing in Hong Kong, PMI shows
Reuters in Hong Kong
Business activity in Hong Kong’s private sector ended five months of contraction in September as the HSBC purchasing managers index (PMI) reached 50 for the first time since March.
A PMI above 50 indicates expansion, while a figure below 50 denotes contraction.
Last month’s reading was a slight improvement from the 49.7 in July and August.
New orders received by companies expanded marginally in September, following five months of declines. However, a further reduction in new business from mainland China weighed on the overall rise in new orders.
Employment contracted for the seven consecutive month, although at a modest rate.
Total operating costs faced by firms rose for the 14th consecutive month in September, and the rate of inflation was the fastest in four months. The latest rise in costs reflected higher purchasing prices and salaries.
“Business activities in Hong Kong are stabilising, as the September headline PMI ended the previous five consecutive months of contraction thanks to gradual improvement in new orders and output,” Hongbin Qu, HSBC’s chief economist, China and co-head of Asian economic research, said in a statement.
“Hong Kong’s economy should find support from the ongoing recovery of the mainland economy, improving global demand and steady local labour market conditions,”
The PMI is based on data collected for HSBC by Markit, based on a survey of about 300 Hong Kong companies in sectors including manufacturing, services, retail and construction.