Hong Kong: PMI freefalls in August amid intensifying protests and trade tensions
September 4, 2019
The IHS Markit Purchasing Managers’ Index (PMI), plunged from 43.8 in July to 40.8 in August, marking the lowest reading since February 2009 amid mass protests and elevated global trade tensions.
The decline was mainly driven by sharper falls in production and new orders. Record-low demand from mainland China, mainly the result of a weaker yuan, the U.S.-China trade war and protests, was behind the steep plummet in new order intakes. Moreover, business sentiment deteriorated sharply. On the price front, both input and output prices were reduced in August.
Commenting on August’s print, Bernard Aw, an economist at IHS Markit, noted:
“The latest PMI data reveal a Hong Kong economy flirting with recession in the third quarter as business activity is increasingly aggravated by protest-related paralysis. The survey is now broadly indicative of the economy contracting at an annual rate of around 4.0-4.5%.”
Author: Steven Burke, Economist