HSBC's Hong Kong PMI falls to 48.6 in April

The private sector contracted much faster.

Hong Kong's private sector contracted at a faster pace in April according to the HSBC Hong Kong PMI, which fell to 48.6 from 49.6 in March.

According to a research note from HSBC Global Research, this was driven by falls in output and new orders. Further, new orders from Mainland China also deteriorated at a faster pace, suggesting that the slowdown is likely to continue given the weakness in the recent China activity data.

Here's more from HSBC Global Research:

As the second consecutive reading below 50, April's PMI survey confirms the broad-based deterioration in economic conditions in the SAR. The downward trend in new orders is being reinforced by the slowdown in the Mainland China economy, with new business from the Mainland falling at a faster rate than for overall new orders.

The risks to other data are also to the downside. The PMI survey suggests firms are continuing to cut employment. This may now be having an impact on wages, as the staffing costs sub-index is now down to its lowest reading since July 2009.

With domestic demand likely to remain subdued due to deteriorating labour market conditions, the outlook for the economy will likely depend on when the data turns around in the Mainland, by far the largest export market for Hong Kong.

The HSBC Hong Kong PMI fell further in April, driven by contractions in output and new orders.