Hong Kong’s PMI plunges to lowest level in 19 months

Blame it on private sector.

The HSBC Hong Kong Purchasing Managers Index plummeted to a low of 48.7 in June from 49.8 in May as both output and new orders dropped amid the weak global economy. A reading below 50 signals a contraction in manufacturing activity while anything above that means expansion

The June PMI reading is the third consecutive month of contraction and is the lowest since November 2011, indicating the further weakening of the business conditions, HSBC said.

Output shrank for the second straight month in June and the seasonally adjusted output index indicated the strongest fall in nine months.

Input costs faced by private sector companies continued to rise in June, although the overall rate of input price inflation was modest and the slowest since last August.

Analysts said persistent weakness in the West and more importantly China's reform-induced slowdown is inevitably cooling Hong Kong's economy.