Hong Kong business conditions continue to worsen as key economic index falls for fifth month in a row
Purchasing managers' index declines to 48.2 as companies say their clients are unwilling to spend money and fewer tourists arrive in city
Hong Kong's private business sector contracted for the fifth month in a row last month on downward demand, leading to fewer jobs, according to a key economic index.
The Nikkei/Markit Hong Kong purchasing managers' index (PMI), which gauges business conditions in the private sector, including manufacturing, services, retail and construction, dropped to 48.2 last month, down from 49.2 in June.
A PMI of more than 50 means the economy is expanding and below means contraction. Markit said the latest figure for Hong Kong meant "further deterioration" in the business sector. The 300 plus companies who responded to the survey said this was due to clients who were not very willing to spend money, and fewer tourists coming to the city.
Annabel Fiddes, an economist at Markit, said the downward trend may continue.
"Looking ahead, the PMI data suggest Hong Kong's economy may struggle to get back into expansionary mode, as companies continued to cut staff numbers while reducing their inventories at the quickest rate since 2011," she said.
"Moreover, firms suffered a further marked fall in new business from mainland China, which continues to weigh heavily on overall new orders."
A recent Legislative Council research report echoes the problem with tourists, saying the number coming to Hong Kong isn't growing as much as it used to, and the people who are coming aren't spending as much.
