Hong Kong: Private-sector business conditions continue to deteriorate in July
The S&P Global Hong Kong SAR Purchasing Managers’ Index (PMI) rose to 49.5 in July from 48.2 in June. As a result, the index remained below the 50.0 no-change threshold, but signaled a softer deterioration in private-sector operating conditions compared to the previous month.
The easing of the downturn in Hong Kong’s private sector was primarily due to a softer reduction in incoming new orders and output, alongside a return to growth in new business from Mainland China. Employment levels fell in July, reflecting lower capacity pressures, though mainly due to the non-replacement of job leavers rather than outright redundancies.
Average input costs in the private sector rose at the slowest pace in three-and-a-half years. However, companies opted to raise their selling prices at a faster rate, thus boosting firms’ margins. Overall sentiment in the private sector remained pessimistic, extending a year-long trend of downbeat assessments.