Hong Kong Private Sector Activity Contracts in August

The S&P Global Hong Kong SAR PMI fell to 49.5 in August 2026 from 51.0 in July, signaling a renewed deterioration in private sector business conditions after three consecutive months of expansion. Output and new orders both contracted for the first time since April, as higher prices and weaker domestic and global demand weighed on activity and sales. New export business also declined marginally, although demand from Mainland China edged higher. Meanwhile, input cost inflation accelerated to a three-month high, driven by higher raw material and staff costs, prompting firms to raise selling prices at the fastest pace since April 2023. Employment declined for a fifth consecutive month as weaker demand and spare capacity discouraged hiring. Looking ahead, business confidence weakened further, with firms increasingly pessimistic about the year-ahead outlook amid concerns over the domestic economy, US tariffs and geopolitical uncertainty.

The S&P Global Hong Kong SAR PMI fell to 51 in July 2026, from a four-month high of 52.0 in the previous month. Still, it remained in expansion territory for a third consecutive month as output growth accelerated to its fastest pace in five months. New orders also continued to expand for a third straight month, though softer overseas demand led to slower overall sales growth than in June. Meanwhile, firms continued to trim headcounts, with employment declining at the sharpest rate in three years as businesses sought to contain costs. On the pricing front, inflationary pressures softened, with input costs rising at the slowest pace since March, while output price inflation also eased at the start of the third quarter. Looking ahead, business confidence deteriorated, with companies turning more pessimistic about the year-ahead outlook amid concerns over domestic economic environment and inflationary pressures.

The S&P Global Hong Kong SAR PMI increased to 52.0 in June 2026 from 50.4 in May, marking a second consecutive month of expansion in private-sector activity. It was the strongest growth in the private sector since February, supported by stronger upturns in output and new orders. New orders grew for the second straight month, driven by improving demand and greater spending during the World Cup. However, employment continued to fall, with the pace of job shedding remaining marginal. Firms also lowered their purchasing activity for the first time since last September amid concerns over the outlook for sales, while delivery times lengthened due to supplier shortages and shipping delays. On prices, input costs rose, driven by higher raw material prices. However, input cost inflation eased from the previous month. As a result, firms raised selling prices, partially passing on higher costs to customers. Finally, business sentiment weakened due to subdued local demand.