Hong Kong: PMI falls deeper into negative territory in August
September 5, 2015
The NIKKEI Purchasing Managers’ Index (PMI) fell from 48.2 in July to 44.4 in August, which was its lowest level since April 2009. As a result, the PMI is further below the 50-threshold that separates contraction from expansion in business conditions.
August’s disappointing result came on the back of significant drops in output and new business, which both fell at the sharpest rates in over six years. Purchasing activity contracted as well, declining at the steepest rate since February 2009. The economic slowdown in China was a key factor driving down the index as new business from Mainland China fell at the sharpest rate since December 2008. NIKKEI analysts pointed out that, “the data continue to point to weaker demand conditions amid an uncertain global economic outlook, as fears continue to mount over China’s growth prospects. [...] It seems unlikely that the performance of the sector will improve unless demand conditions pick up, as further cuts to output, staff numbers and purchasing activity suggest that the sector will remain in contractionary territory at least in the near-term.”
Author: Eric Denis , Economist