ECONOMY | Staff Reporter, Hong Kong

PMI down to 47.1 in November as Chinese business suffers deep losses

Exports to China fell at the fastest pace in three years.

Business conditions in Hong Kong’s private sector economy continued to deteriorate as the Purchasing Managers Index (PMI) fell to a two-year low of 47.1 in November, according to IHS Markit. 

Also read: Trade war could cut 1% of Hong Kong GDP

“Private sector activity across Hong Kong continued to be adversely impacted by ongoing US-China trade frictions. Latest Nikkei PMI data indicated a further deterioration in the health of Hong Kong’s business conditions midway through the fourth quarter,” Bernard Aw, principal economist at IHS Markit said in a statement.

The Nikkei Hong Kong PMI is a leading indicator of economic health to gauge business conditions in the private sector. PMI readings below 50 represent an economic contraction.

Also read: Economic growth slows to 2.9% in Q3

Business confidence took a beating and remained dismal with the Future Output Index hitting the lowest point since March 2016.

Firms booked less output and new orders as sales to China dropped sharply. Exports to China also fell at the fastest pace in three years.

Weak demand conditions was dragged by inflows of new business which declined for the eight consecutive month and at the steepest for nearly two and a half years. In response to the sluggish environment, firms lowered their selling prices for the fourth straight month despite higher overall input prices.

“Forward-looking indicators suggest that further momentum could be lost in coming months,” added Aw.

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