Output and new orders of Hong Kong firms both marginally increased in September while employment continued to decline, a HSBC survey released Friday.
According to the latest HSBC Hong Kong Purchasing Managers' Index (PMI), the figure posted at the 50.0 no-change mark in September, indicating that business conditions were unchanged from August (49.7). Meanwhile, price pressures picked up, with input costs and output charges rising at the fastest rates in four and eight months respectively.
Nonetheless, the stable trend marked an improvement from the declines seen in the previous five months. Following a five-month sequence of reductions, the volume of new orders received by Hong Kong private sector firms increased in September. Analysts largely linked this to new contract wins and greater demand.
Concurrently, output increased in September, after a four-month period of reduction. Although marginal, the rate of activity growth was the strongest since March. The level of outstanding business at private sector companies continued to fall, but at only a marginal rate.
The quantity of inputs bought by firms in Hong Kong's private sector was broadly unchanged in September. Meanwhile, input inventories increased for the third consecutive month, albeit marginally and at the weakest rate in this sequence.
Input costs faced by private sector companies continued to rise in the month, taking the current sequence of inflation to 14 months. Overall, total costs rose at a solid rate, which was the fastest in four months and slightly stronger than the long-run series average.
Commenting on the Hong Kong PMI survey, Hongbin Qu, chief economist, China & Co-Head of Asian Economic Research at HSBC, said that business activities in Hong Kong are stabilizing as the September headline PMI ended the previous five consecutive months of contraction.
"Hong Kong's economy should find support from the on-going recovery of the mainland economy, improving global demand and steady local labor market conditions," Qu said.
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