ECONOMY | Staff Reporter, Hong Kong

PMI falls to 50.6 in March amidst slowing factory output

This was the weakest showing in five months.

Hong Kong's private sector lost some of its momentum it has gained at the start of the year as PMI fell marginally from 51.7 in February to 50.6 in March amidst declining factory output, according to IHS Markit.

The Nikkei Hong Kong PMI is a leading indicator of economic health as it gauges business conditions in the private sector.

“Whilst Hong Kong’s private sector started 2018 on a solid footing, March data revealed signs of slowing momentum in business activity,” noted IHS Markit principal economist Bernard Aw. “The rate of purchasing activity eased to the weakest in ten months, whilst inventories continued to be depleted.”

Growth of new business also fell from its peak in February, further aggravated by a slower increase in export sales to China. Demand from the Mainland also fell alongside the depreciation of the yuan, bringing about the sector's weakest showing in five months.

Business expectations also remained muted amidst concerns of competition and shrinking customer budgets.

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