Hong Kong PMI July 2020

Hong Kong

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."

FocusEconomics Consensus Forecast panelists expect fixed investment to contract 9.8% in 2020, which is unchanged from last month’s forecast. Moving to 2021, the panel sees fixed investment growing 6.2%.


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Hong Kong PMI Chart

Hong Kong PMI July 20 20 0

Note: Nikkei Hong Kong Purchasing Managers’ 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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