The private sector in Hong Kong made a notable return to expansion in October after a stagnant September, as reported by S&P Global on Wednesday. The purchasing managers index (PMI) for Hong Kong finalized at 52.2 in October, an improvement from the flat 50.0 in September, thus surpassing the crucial threshold of 50 that differentiates growth from a contraction. Central to the latest upturn in business conditions was an improvement in demand.
Incoming new orders surged at the fastest pace in one and a half years, with survey panelists often attributing this increase to stimulus policies implemented in mainland China and rising tourism interests. In contrast to most regions or nations, the special administrative region of Hong Kong relies on a solitary PMI encompassing the entire economy, as opposed to distinct PMIs for the manufacturing and service sectors.
October saw Hong Kong enterprises report strains from the supply side, which included another decline in vendor performance. Supply shortages and shipping delays resulted in extended lead times for various materials and products. As for the labor market, employers in Hong Kong saw a slight reduction in payrolls in October.
This trend was largely influenced by resignations and the decision not to replace departing employees. Additionally, businesses faced rising input prices in October, yet they maintained their charges stable to support sales, as noted by S&P Global. Despite the improvements observed in October, business managers in Hong Kong exhibited caution.
Sentiment remained pessimistic, albeit the level of pessimism diminished to a near one-year low as concerns associated with the economic outlook lessened. The Hong Kong PMI has been compiled by S&P Global from surveys returned by 400 private-sector companies during the period from October 10 through October 28..