Expansion of Hong Kong's Private Sector Eases in June: IHS Markit

Hong Kong: The pace of expansion of Hong Kong SAR’s private sector eased in June, according to data issued by IHS Markit today.
 
The headline seasonally adjusted IHS Markit Hong Kong SAR Purchasing Manager’s Index™ (PMI™) posted 51.4 in June following a reading of 52.5 in May. 
 
This represented the fifth successive month in which the Hong Kong SAR private sector
registered better business conditions. 

The rate of expansion softened from the previous month, however.
 
"Improving economic conditions amid the stabilisation of the covid-19 situation enabled Hong Kong SAR’s private sector to continue expanding in June, albeit
at a marginally slower rate according to the latest IHS Markit PMI," said IHS Markit Economics Associate Director Jingyi Pan in a press release on Tuesday.
 
Contributing to the lower headline PMI reading were dips in both the Output and New Orders indices. 
 
Although production and demand remained in growth territory, rates of expansion
slowed from the more than three-year highs seen in May.
 
Businesses generally reported continued improvement in economic conditions as the covid-19 pandemic situation stabilised in Hong Kong SAR.
 
Foreign demand meanwhile fell in June amid reports of a resurgence in covid-19 cases in countries where overseas customers were situated, leading to lower demand. This
included new business inflows from China, which were once again lower in June after briefly rising in May.
 
"Price pressures sustained for Hong Kong SAR private sector firms. The trend with accelerating wage inflation amid lower employment levels indicated potential
hiring constraints, which is a phenomenon we have likewise observed in other parts of the world through the PMI surveys. This is an area to further observe," the economist stated.
 
Overall optimism in Hong Kong SAR sustained at a slightly lower level in June, although confidence did not translate to an increase in employment levels. 
 
Staffing levels decreased modestly for the second month running.
 
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