Key Hong Kong economic index falls for second month
Mainland slowdown has negative effect on firms for second consecutive month, PMI index shows
Hindered by the slowdown in the mainland economy, business conditions in Hong Kong continued to worsen last month, HSBC indices released yesterday showed.
The HSBC Hong Kong purchasing managers' index, which gauges business conditions in the private sector including manufacturing, services, retail and construction, fell for the second month in a row from 49.6 in March to 48.6 in April. In February the PMI stood at 50.7.
The extent of the drop is the sharpest since October. Any reading below 50 denotes business contraction while a reading above 50 signals expansion.
"As the second consecutive reading below 50, April's PMI survey confirms the broad-based deterioration in economic conditions in the SAR," HSBC economist John Zhu wrote in an analysis.
"The downward trend in new orders is being reinforced by the slowdown in the mainland China economy, with new businesses from the mainland falling at a faster rate than for overall new orders."
Data is compiled from questionnaires completed by executives at more than 300 companies. The output sub-index and new business from mainland China sub-index also each fell 1.6 to 48.7 and 46.6 respectively.