Hong Kong: PMI improves in March pointing to a marginal expansion in activity
The IHS Markit Hong Kong SAR Purchasing Managers’ Index (PMI) increased from 50.2 in February, to 50.5 in March. As a result, the PMI was marginally above the critical 50-threshold, suggesting that operating conditions in the Hong Kongese private sector improved slightly in March relative to the previous month.
The fractional improvement in activity was likely due to firms expanding their headcounts in March at the fastest pace in a decade amid signs of firming demand. That said, Covid-19 restrictions continued to hamper output and new orders, albeit at a less severe pace than in the month prior. On the price front, input prices rose mildly, while output charges continued to fall as firms looked to spur demand amid strong competition.
Commenting on the latest PMI reading, Andrew Harker, economics director at IHS Markit, noted:
“Although firms were less confident in the outlook than in February, the strongest job creation in a decade and a ramping up of inventories suggest that they are poised to expand activity should demand conditions show further signs of improvement in the months to come.”