Hong Kong manufacturing PMI rises in August, remains below 50-point mark

Hong Kong’s Manufacturing Purchasing Managers’ Index (PMI) rose during the month of August, although it remained slightly below the 50-point mark that separates expansion from contraction.

The Nikkei Hong Kong Purchasing Managers Index rose to 49.0 in August from 47.2 in July, but remained in contractionary territory for the 18th consecutive month, indicating a continued deterioration in Hong Kong's private sector, data released by Markit Group showed Monday.

Private sector companies based in Hong Kong signalled a further contraction of output in August. That said, the pace of decline was modest and the weakest seen since June 2015. The softer reduction in output coincided with an easing in the rate at which total new work fell.

Furthermore, new orders from mainland China declined at only a marginal pace that was the slowest recorded for 18 months. While some panellists cited signs of improving client demand, a number of firms commented that relatively weak economic conditions continued to weigh on overall sales, Markit reported.

"Overall, the data suggest that the worst may be over, but there still needs to be a meaningful upturn in  client demand in order for a strong and sustained recovery to take place, which may be challenging given the relatively weak global economic environment," said Annabel Fiddes, Economist, IHS Markit.