Hong Kong PMI September 2020

Hong Kong

Hong Kong: Private sector PMI edges up in September

October 7, 2020

The IHS Markit Hong Kong SAR Purchasing Managers’ Index (PMI) rose to 47.7 in September from 44.0 in August. That said, the PMI remained below the critical 50-threhold, suggesting that operating conditions in the Hong Kongese private sector deteriorated for the 30th consecutive month in September.

September’s improvement was largely driven by a softer decrease in both output and new business, amid the easing of some of the pandemic-related restrictions, including the length of operating hours permitted. That said, backlogs of work continued to shrink, partly reflecting a continued decline in export sales. On a more positive note, firms increased their staffing levels at the fastest rate in six-and-a-half years in September. On the price front, input costs remained broadly stable while output prices fell at the softest rate in over a year. Lastly, businesses confidence rose to a 15-month high, although it remained firmly negative amid lingering uncertainty.

Commenting on the result, Bernard Aw, principal economist at IHS Markit, said:

"Hong Kong's private sector moved closer towards stabilisation at the end of the third quarter. […] Nevertheless, the average PMI for the third quarter was only modestly higher than the second quarter: a rise from 43.5 to 45.4, hinting that the Hong Kong

economy will continue to face formidable challenges in the months ahead. The uncertainty surrounding the pandemic trajectory remains a key concern in the absence of an effective vaccine."

FocusEconomics panelists forecast fixed investment to contract 15.5% in 2020, which is down 4.4 percentage points from last month’s projection. Moving to 2021, the panel sees fixed investment growing 7.8%, which is up 1.3 percentage points from the previous month’s estimate.

Author:, Research Team Manager

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Hong Kong PMI Chart

Hong Kong PMI September 20 20 0

Note: IHS Markit Hong Kong SAR Purchasing Manager’s Index (PMI). Readings above 50 indicate an overall increase compared to the previous month, and below 50 an overall decrease.
Source: IHS Markit.

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