Hong Kong's private sector ends 3-year decline in output

The Purchasing Manager’s Index posted 50.3 in April, IHS Markit reported.

Hong Kong’s Purchasing Manager’s Index (PMI) posted 50.3 in April, falling slightly from 50.5 in March, but represented the third consecutive month a marginal improvement in business conditions has been recorded, the IHS Markit reported.

The improvement was attributed to the gradual easing of restrictions as well as the reduced number of COVID-19 cases in the start of the second quarter of the year.

“As a result, business activity expanded, thereby ending a three-year sequence of decline,” the IHS Markit said, adding that total new orders also stabilised in April.

Business confidence also improved to the highest in more than seven years, whilst employment increased for the third month.

In a separate report, the OCBC noted this indicated that the “worst may have been over” for the labour market; but noted some businesses may still be in doldrums as the IHS reported the decrease in new export orders and new business from Mainland China persisted.

Moreover, firms continued to lower their selling prices even as the rising price of raw materials drove purchase cost to “accelerate sharply.” Aside from purchase cost, staff cost also increased modestly and at a slower pace.

“Overall input costs rose at the sharpest pace in three-and-a half years, but Hong Kong SAR companies continued to lower their own selling prices in April,” the IHS report also read.

“Respondents indicated that discounts were offered as part of efforts to attract customers and in response to competitive pressures. Charges decreased only marginally, however.”