Hong Kong: PMI dips but remains in expansionary territory in May
June 5, 2017
The Nikkei Hong Kong Purchasing Managers’ Index (PMI) released by IHS Markit came in above the 50-point threshold for only the second time this year in May, despite inching down from 51.1 in April to 50.5. May’s print suggested that the territory’s private sector expanded for a second consecutive month for the first time in nearly three years. Moreover, this was only the third month in more than two years that the Nikkei PMI recorded an expansion, following December’s brief jump to 50.3.
Higher output and an increase in exports to mainland China—the first increase in nearly three years—supported expansion in the private sector, although growth slowed from a month earlier as new orders from elsewhere fell and inventory growth weakened. Purchasing activity was higher, putting pressure on supply chains. Wages increased notably, likely due to a rise in the minimum wage. Employment levels, on the other hand, rose more modestly. Facing rising cost inflation, firms raised prices for the first time since January. Meanwhile, business confidence remained downbeat for another month.
Author: Christopher Thomas, Economist