Hong Kong: PMI dips hits a near 12-year low in October, as business activity nose dives
November 5, 2019
The IHS Markit Purchasing Managers’ Index (PMI), dropped to 39.3 in October from 41.5 in September—the lowest reading since November 2008.
October’s deterioration was mainly the result of new orders falling at the steepest pace since January 2009, led by a record decrease in new orders from mainland China. Moreover, inventory levels increased at the fastest pace in the survey’s history, while backlogs of work continued to decline. Needless to say, business sentiment slumped to an all-time low in October. On the price front, input prices increased in October, while output prices fell in an attempt to boost sales and competitiveness.
Commenting on October’s print, Bernard Aw, principal economist at IHS Markit, noted:
“The ongoing political unrest and impact of trade tensions saw business activity fall at the sharpest pace since the survey started over 21 years ago. Anecdotal evidence revealed that the retail and tourism sectors remained particularly affected.”
Author: Steven Burke, Economist