Hong Kong: PMI posts a fourth consecutive month of expansion in July
August 3, 2017
The Nikkei Hong Kong Purchasing Managers’ Index (PMI) released by IHS Markit came in above the 50-point threshold for a fourth consecutive month—a multi-year first—in July, edging up to 51.3 from 51.1 in June. July’s print appeared to confirm that the steady recovery of the territory’s private sector that began in earnest at the outset of Q2 was still ongoing into early-Q3.
An acceleration in output and new orders supported expansion in the private sector, with stronger sales growth to mainland China underpinning July’s overall improvement from a month earlier. Moreover, sustained output growth put pressure on operating capacity and that was reflected in higher backlogs due by firms for only the second month in more than two years. Relatedly, hiring increased marginally as firms sought to adjust to higher operational demand. Meanwhile, cost inflation slowed from June as tepid wage growth offset higher prices for other inputs and consequently led only to a modest rise in selling prices. Business confidence, however, remained downbeat for another month as the prospect of higher U.S. interest rates and a still-weak business climate weighed on firms’ outlooks.
Author: Christopher Thomas, Economist