The Zhitong Finance App learned that S&P Global announced that the Hong Kong Purchasing Managers' Index (PMI) fell to 49.5 from 51 last month after seasonal adjustments in August, reflecting a contraction in the business environment. Although the decline was not significant, it was the first time since May this year.
Looking at the most recent survey month, private enterprises in the Hong Kong Special Administrative Region cut production for the first time since May this year, but the contraction was not significant. Survey data revealed that the decline in new orders, combined with a slowdown in the local economy, is slowing down business growth. As for the new export business, there was also a slight contraction, but there was a slight increase in the number of orders received from mainland China.
In terms of prices, overall investment costs rose in August, and the increase widened to a three-month high; the surveyed companies said that due to the rise in raw material prices, procurement prices continued to soar, driving the rate of increase in costs. Furthermore, the cost of employee compensation is also expanding at an accelerated pace. In order to ease profit pressure, private enterprises in Hong Kong then raised their sales prices. The related price increase was the largest since May 2023.
As new orders were tightened, the backlog of work in August was further reduced. Currently, the company has been streamlining manpower for 5 consecutive months, reflecting idle production capacity and cooling demand, which have greatly reduced the company's recruitment intentions.
Usamah Bhatti, a financial economist at S&P Global Markets, said that the recent purchasing managers' index shows that the business climate is turning backwards. As sales in the international and local markets declined at the same time, output and new orders also returned to the tight range.
Usamah Bhatti pointed out that the backlog index is a leading indicator reflecting limited production capacity. Currently, it has been falling for two consecutive months. Coupled with the further reduction in employment, the forward-looking indicators are also weak. Furthermore, companies continue to worry about the future and are concerned about the continuing trend of the local economy, US tariffs, and geopolitical risks.