Hong Kong: PMI remains in negative territory in September
October 7, 2014
The HSBC Purchasing Managers’ Index (PMI) inched up from 49.6 in August to 49.8 in September. Despite the fractional improvement, the PMI remained below the 50-threshold that separates expansion from contraction in business conditions.
September’s figure reflected weak business conditions for a second consecutive month. Overall output increased only slightly, and while new orders were broadly unchanged, new work from Mainland China was down for the second month in a row. Moreover, businesses cut their staffing levels at the highest rate in four months in September.
HSBC analysts pointed out that, “Hong Kong's economy is starting to stabilise, but the impact of the cyclical slowdown is being felt through deteriorating labour market conditions. Although output grew marginally in September, firms cut employment at a faster pace and that could put a downward drag on consumption in the next few quarters. New orders will likely have to pick up more significantly in the coming months before the downward trend in employment reverses.”
Author: Carl Kelly, Economist