Hong Kong PMI April 2017

Hong Kong

Hong Kong: PMI returns to expansionary territory in April

May 5, 2017

The Nikkei Hong Kong Purchasing Managers’ Index (PMI) released by IHS Markit climbed above the 50-point threshold for the first time this year in April, rising from 49.9 in March to 51.1. April’s print suggested that the territory’s private sector returned to expansion in April following three months of contraction. This was only the second month in more than two years that the Nikkei PMI recorded an expansion—following December’s brief jump to 50.3—and marked the strongest reading in 38 months.

Improvement in April was due to a rise in new orders and growth in output. Higher volumes of new business were recorded on the back of stronger global growth, although Chinese demand for Hong Kong products continued to decline—albeit at a slower pace in April. Employment was broadly stagnant in the month as a result of excess capacity, while backlogs were cleared at the slowest pace in nearly two years. Despite an uptick in inflation, firms cut prices in an effort to clear inventory and remain competitive. Although business confidence remained downbeat, April’s expectations for future output were the most optimistic since June 2015.

FocusEconomics Consensus Forecast panelists see fixed investment increasing 2.1% in 2017, which is unchanged from last month’s estimate. For 2018, the panel also expects fixed investment to reach 2.1%.

Author:, Economist

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Hong Kong PMI Chart

HongKong PMI April 2017

Note: Nikkei Hong Kong Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: Nikkei and IHS Markit.

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