Hong Kong: PMI improves in January, but remains in contractionary territory
February 3, 2021
The IHS Markit Hong Kong SAR Purchasing Managers’ Index (PMI) increased to 47.8 in January, from 43.5 in December. As a result, the PMI remained below the critical 50-threshold, suggesting that operating conditions in the Hong Kongese private sector continued to contract at the start of the first quarter.
Ongoing Covid-19 restrictions and social distancing measures continued to drag on private sector activity in January albeit at a less severe rate relative to December. The slight recovery reflected a notably softer fall in employment levels amid upbeat business confidence among firms. Moreover, the dip in new orders and output eased from December but remained depressed logging the second-worst result since August 2020. Meanwhile, supply shortages and constraints sent suppliers’ delivery times to the highest level since the series began back in 1998—which likely curtailed output levels somewhat in January potentially muddling the headline print.
Author: Steven Burke, Economist