Hong Kong Private Sector Activity Contracts in August

The S&P Global Hong Kong SAR PMI declined to 49.2 in September 2026 from 49.1 in August, marking the second straight month of contraction. It was the fastest contraction in private-sector business activity since April, as new orders and output fell for the second straight month due to challenges in the economic environment. However, foreign sales rose for the first time in three months and at the sharpest pace since May. Employment continued to decline, posting its sharpest fall in almost six-and-a-half years. Meanwhile, purchasing activity increased, helping inventory levels to rise for the fifteenth time in the past 16 months. Delivery times lengthened due to higher transportation costs. On the price front, input costs rose, boosted by higher raw material costs, while output cost inflation eased due to discounts as part of efforts to boost sales. Lastly, sentiment weakened to its lowest level since 2020, amid higher tariffs, increased competition, and challenging business conditions.

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.