This aerial photo taken on June 27, 2017 shows the scenery on the both sides of the Victoria Harbour in Hong Kong. (LUI SIU WAI / XINHUA)
The expansion of Hong Kong’s private sector picked up speed in May as the IHS Markit’s Hong Kong Purchasing Managers’Index rose to 52.5 last month following a reading of 50.3 in April, thanks to the relaxation of COVID-19 containment measures.
The figure was the highest since Feb 2014, the London-based information provider said, and it represented the fourth successive month in which the city’s private sector registered stronger business conditions.
PMI readings above 50 represent expansion while those below that level signify contraction. PMI readings are sequential and represent month-on-month expansion or contraction.
PMI readings above 50 represent expansion while those below that level signify contraction. PMI readings are sequential and represent month-on-month expansion or contraction
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Another positive sign came from business activity, which recorded improvement at the fastest pace since Feb 2018.
New business from abroad, in particular, rose for the first time since March 2019 and this included new business from the Chinese mainland which saw growth after declining for three years in a row. This mainly resulted from the stabilization of COVID-19 conditions.
Private-sector employment levels, however, didn’t fare any better, with firms reporting lower staffing levels on average for the first time in four months, said Pan Jingyi, economics associate director at IHS Markit.
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In addition, the survey indicated that despite the robust increase in demand, private sector firms also saw their accumulation of backlogged work accelerate in May at the fastest pace since Feb 2014.
“Further relaxation of the COVID-19 restrictions at the end of April had a visibly positive effect on Hong Kong SAR’s private sector performance in May. The improvement in economic conditions and business confidence enabled further expansion of economic activities,” Pan noted.
Following positive GDP growth in the first quarter, Pan said the city’s economic output is on pace to grow at 6.8 percent by year-end.