Hong Kong: Private sector shrinks in July after briefly stabilizing in June
August 5, 2020
The IHS Markit Hong Kong SAR Purchasing Managers’ Index (PMI) fell to 44.5 in July, after rising to 49.6 in June from 43.9 in May. As a result, the PMI fell further below the 50-threhold that indicates an improvement in the private sector economy over the previous month. July’s reading was hampered by an increase in coronavirus restrictions to arrest new outbreaks of the virus.
A steeper fall in business activity and new orders in July drove the decrease in the PMI. As a result, businesses scaled back on purchasing activity and inventories plummeted. Regarding the outlook, businesses became less confident, with worries about the impact of the virus on the economy rising. Commenting on what this means for jobs, Bernard Aw, principal economist at IHS Markit, said: "While employment remained broadly unchanged, the concern is that further severe deteriorations in business conditions will see a new round of job losses."