On June 6, 2024, the latest Hong Kong PMI (Purchasing Managers’ Index) was released by S&P Global. In May, it recorded 49.2, showing a slight decrease compared to the previous month’s 50.6, falling below the threshold of 50, indicating a contraction in the economy.
According to Jinyi Pan, Deputy Director of the S&P Global Market Intelligence Economic Research Department, “The Hong Kong PMI shows that the business environment deteriorated in the middle of the second quarter of 2024, as evidenced by the decline in orders since last month. Employment declined for the first time since November last year, and output also contracted.”
The report mentioned that input costs continued to rise in May, but companies lowered output prices for the first time since March 2022, putting pressure on profits. Due to bleak prospects, companies are absorbing cost increases and offering additional discounts to customers to maintain sales.
Pan further pointed out that with new orders in May falling to a 20-month low, forward-looking indicators including the new orders index and backlog of work index all suggest that the recent operating environment is likely to remain sluggish.
A PMI reading above 50 indicates economic expansion, while a reading below 50 indicates economic contraction.