Why Hong Kong business outlook remains gloomy despite slight September growth
PMI rebounds to 51.2 in September from 49.7 in August, but weak mainland demand dampens sentiment
Hong Kong’s private sector rebounded to record a slight growth in September, according to a key economic indicator, although businesses retained a pessimistic outlook for the year ahead.
Analysts expect the city to be on track for an economic growth of 3.5 per cent for the full year, in line with the government’s forecast of 3 to 4 per cent.
The Nikkei Hong Kong Purchasing Managers’ Index, which gauges private sector business conditions including manufacturing, services, retail and construction, rebounded to 51.2 in September – up from August’s 49.7 mark.
A score of 50 or above signals growth in the economy, while anything below reflects decline. The rate of growth or contraction is shown by how far the figure deviates from the median of 50.
The index is calculated from a monthly poll of executives from more than 300 companies in the city to gauge sentiment in the city’s private sector.
“Hong Kong’s private sector showed signs of recovery at the end of the third quarter but business sentiment remained downbeat,” Bernard Aw, principal economist at UK-based analytics firm IHS Markit, said.