Protests and trade war push HK Aug's commercial activity to its lowest level since February 2009: PMI
HONG KONG (Reuters) - Hong Kong's private sector activity declined at the fastest pace in more than a decade in August, a business survey showed Wednesday, when a rising trade war and local political unrest affected all aspects Of demand.
The IHS Markit Hong Kong Purchasing Managers' Index (PMI) fell to 40.8 in August from 43.8 in July, signaling the largest deterioration in the private sector since February 2009.
The latest PMI data reveals a Hong Kong economy that flirts with the recession in the third quarter as business activity is increasingly aggravated by paralysis related to protests, said Bernard Aw, principal economist at IHS Markit.
Hundreds of thousands of people have taken to the streets since mid-June in protests in favor of greater democracy in the former British territory. The demonstrations pose a direct challenge to Beijing, which has accused foreign powers, particularly the United States and Great Britain, of fomenting riots.
Both winds against trade and the political crisis have fueled corporate pessimism, and confidence has plummeted to its lowest recorded level, according to the survey.
New orders continued to decline and at the fastest pace since February 2009, driven by a record decline in the new businesses in mainland China.
Hong Kong is on the verge of its first recession in a decade, as the economy contracted 0.4% in April-June from the previous quarter, the data showed, as the increasingly violent protests rejected the tourists and affected retail sales in one of the most popular shopping in the world. Destinations
(Meg Shen Report; Sam Holmes Edition)