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Hong Kong PMI declines to seven-month low in March

Staff writer ▼ | April 7, 2016
March survey data indicated the quickest deterioration in Hong Kong private sector operating conditions for seven months.
Hong Kong
Asia   Nikkei Hong Kong PMI
Output and new business both contracted at the fastest rates since last September, which in turn contributed to a quicker decline in staff numbers. Weak market conditions and fewer new orders led firms to reduce their purchasing activity sharply over the month, while destocking activities persisted.

As part of attempts to secure new work, prices charged fell for the eighth month in a row. Meanwhile, total input costs declined slightly in March, thereby offsetting a marginal rise in February.

The headline Nikkei Hong Kong Purchasing Managers’ Index (PMI) registered at 45.5 at the end of the first quarter, down from 46.4 in February, to signal a further deterioration in Hong Kong private sector operating conditions. Furthermore, the pace of deterioration was the quickest since August 2015.

The health of the sector has now worsened in each of the past 13 months. Latest survey data pointed to a further fall in Hong Kong private sector output, with the rate of contraction accelerating to the fastest in six months.

Reports from panellists suggested that weak economic conditions and fewer new orders underpinned the latest reduction in output.

As was the case for output, new business declined at the steepest rate since September 2015, which was in part driven by a further sharp fall in new orders from mainland China. According to respondents, poor economic conditions and a strong Hong Kong dollar had both contributed to fewer new orders in the latest survey period.

Staff numbers across Hong Kong’s private sector continued to decline in March, thereby extending the current sequence of job shedding to three months. The pace of reduction, though modest, was the fastest recorded since August 2015.