Hong Kong: Deterioration in the private sector continues to ease in May
June 3, 2020
The IHS Markit SAR (private sector) Purchasing Managers’ Index (PMI) increased to 43.9 in May from 36.9 in April, but remained below the 50-threhold that indicates an improvement in the private sector economy over the previous month. May’s print marks 25 consecutive months of deteriorating operating conditions in Hong Kong’s private sector, but was the highest in four months.
May’s downturn came on the back of declines in new orders, production and exports, albeit all fell at a softer clip than in the previous month. Moreover, business sentiment remained depressed, but improved slightly nonetheless. Employment levels started to show signs of stabilizing, despite dipping slightly from April, as government wage subsidies seemed to have helped with employee retention to some extent.
Commenting on May’s print, Bernard Aw, principal economist at IHS Markit, noted:
“The Hong Kong SAR private economy remained mired in a downturn during May, though the PMI survey showed signs that the economic decline is bottoming out as parts of the economy reopened.”
Author: Steven Burke, Economist