Pedestrians cross the road outside HSBC Main Building in Hong Kong on Aug 2, 2021. (ISAAC LAWRENCE / AFP)
Hong Kong’s private sector expanded for the sixth consecutive month in July, but at a slower rate from June, the latest survey by London-based information provider IHS Markit showed.
The findings were based on responses from purchasing managers in around 400 private companies in Hong Kong
IHS Markit Hong Kong Purchasing Manager’s Index posted 51.3 in July, a slight drop from 51.4 recorded the previous month, amid a gradual economic recovery from the COVID-19 pandemic. A reading above 50 represents expansion while that below 50 signals contraction.
Both output and new orders expanded at a faster rate in July, as stronger economic and consumer confidence brought about by the control of the pandemic stimulated business activities. Readings above 50 in both gauges marked the fourth straight month of growth.
However, foreign demand for Hong Kong’s private sector goods and services eased for a second month and at a faster pace, which survey respondents attributed to the lingering impact of the pandemic. New business inflow from the Chinese mainland also declined for a second consecutive month, but at a slower pace.
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The findings were based on responses from purchasing managers in around 400 private companies in Hong Kong, covering a range of sectors including manufacturing, construction, wholesale, retail and services.
“Demand and output growth accelerated, which had been positive signs, although foreign demand appeared to have softened once again as COVID-19 disruptions remained a prevalent issue abroad,” Pan Jingyi, IHS Markit’s economics associate director, said. “Price pressures also persisted for Hong Kong’s private sector firms.”
“It would be of interest to see the improvement in demand and output translate to a pick-up in employment and buying activity to signal better business confidence.”
The PMI survey also showed growing optimism in output for the next 12 months, with the Future Output Index, the sole sentiment indicator in the survey, rising in July. The firm forecasts Hong Kong’s GDP will grow by 6.8 percent this year.