Hong Kong: PMI deteriorates to the lowest level since February 2021 in January
The IHS Markit Purchasing Managers’ Index (PMI) fell to 48.9 in January from December’s 50.8. Consequently, the index fell below the 50-threshold, pointing to a deterioration in business conditions from the previous month—the first decline since February 2021.
The worsening in business conditions was predominately driven by Covid-19 related disruptions weighing on activity, as both output and new orders declined in January relative to December. That being said, headcounts increased in January, while price pressures eased—but remained elevated nonetheless.
Commenting on the latest PMI reading, Jingyi Pan, an economist at IHS Markit, noted:
“It will be important to see the latest COVID-19 wave coming under control in Hong Kong SAR for the situation to see a turnaround. IHS Markit forecast Hong Kong SAR GDP to expand by 3.0% in 2022.”