Hong Kong: PMI records worst reading since March in August
September 5, 2022
The S&P Global Purchasing Managers’ Index (PMI) came in at 51.2 in August, down from July's 52.3. August's result marked the weakest reading since March. As such, the index remained above the 50.0 no-change mark, but pointed to a moderating improvement in private sector business conditions from the previous month.
August’s reading was a reflection of weaker growth in output and new orders, which were dampened by a rise in Covid-19 cases domestically. Moreover, foreign demand—including from mainland China—declined, as did business sentiment. In addition, employment fell at the joint-sharpest pace in nearly two years in August. More positively, supply constraints and input inflation eased.
Commenting on the latest PMI reading, Laura Denman, an economist at S&P Global, noted:
“The recent spike in Covid-19 cases certainly presents downside risks to Hong Kong SAR’s private sector economy. […] firms face a risk that case numbers will continue to rise, with any implementation of new restrictions having the possibility of weakening demand still further. Since current demand is currently being upheld by domestic orders, as signalled by contractions in both new export orders and new business from Mainland China, this is a worry going forward.”