Hong Kong: PMI drops into negative territory in January
February 4, 2015
The HSBC Purchasing Managers’ Index (PMI) fell from 50.3 in December to 49.4 in January. December’s result had marked a five-month high. As a result, the PMI dipped below the 50-threshold that separates contraction from expansion in business conditions.
January’s figure reflected a sizeable deterioration in output and employment, while new business slowed marginally. Moreover, new business from Mainland China fell for the sixth month in a row. This situation suggests renewed worsening business conditions in the island and that the recent political turmoil has taken its toll on the economy.
HSBC analysts pointed out that, “Hong Kong’s economy remains relatively subdued at the start of 2015, with slower growth domestically as well as in Mainland China continuing to weigh on demand. This has meant that firms are still cutting jobs in the private sector and poses a risk to consumption as a source of growth in 2015.”