Hong Kong PMI December 2019

Hong Kong

Hong Kong: PMI picks up slightly, but remains severely depressed in December

January 6, 2020

The IHS Markit Purchasing Managers’ Index (PMI) picked up to 42.1 in December (November: 38.5), but remained well below the 50-threhold that indicates an improvement in the private sector economy over the previous month. December’s print marks 21 consecutive months of deterioration in Hong Kong’s private sector.

December’s slightly weaker downturn came on the back of a softer fall in business activity following November’s record pace of decline in business activity. Moreover, new business activity continued to fall, albeit at a less pronounced pace than the previous month. Meanwhile, employment levels were virtually unchanged in December. Business sentiment remained downbeat, as many firms expected lower output in a year from now due to ongoing political unrest. On the price front, input and output prices fell in December.

Commenting on December’s print, Bernard Aw, principal economist at IHS Markit, noted:

“The average PMI for the fourth quarter signalled that GDP had fallen by around 5%, indicating that the economic downturn had deepened during the closing quarter of the year [...] There are scant hopes of any imminent improvement as local political tensions failed to show any signs of easing into the new year.”

Looking ahead, political turmoil will continue to weigh on Hong Kong’s private sector. That being said, a potential easing in the U.S.-China trade war with the expected signing of the “Phase One” deal could provide some relief to business investment.

FocusEconomics Consensus Forecast panelists expect fixed investment to contract 0.7% in 2020, which is down 1.0 percentage points from last month’s forecast. Moving to 2021, the panel sees fixed investment growing 3.2%.


Author:, Economist

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Hong Kong PMI December 2019

Note: Nikkei Hong Kong Purchasing Managers’ Index (PMI). Readings above 50 indicate an overall increase compared to the previous month, and below 50 an overall decrease.
Source: Nikkei and IHS Markit.


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