Hong Kong: PMI records worst reading since March in September
The S&P Global Purchasing Managers’ Index (PMI) fell to 48.0 in September from August’s 51.2. September’s result marked the weakest reading since March. As such, the index dropped below the 50.0 no-change mark, signaling a deterioration in private-sector sector operating conditions from the previous month.
September’s reading was a reflection of contractions in output and new orders, which were dampened by a rise in Covid-19 cases in the early part of the month. Moreover, employment declined at the fastest rate in nearly two years amid voluntary redundancies, while demand from mainland China fell and business sentiment was pessimistic. Input costs rose as firms raised wages in a bid to retain workers.
Commenting on the latest PMI reading, Laura Denman, an economist at S&P Global, noted:
“Covid-19 disruptions were reportedly the primary factor weighing on overall sector performance, with firms signalling that limitations on meeting up and a general hesitancy among some customers impacted demand and activity. […] However, with the Covid-19 situation improving towards the end of September and quarantine measures for international travellers having eased, we could hope to see Hong Kong SAR’s private sector rebound in the months ahead.”