Hong Kong's commercial activity contracts at the fastest pace in 21 years
HONG KONG (Reuters) - Commercial activity in the private sector in Hong Kong fell to its weakest point in 21 years in October, overwhelmed by anti-government protests and the smoothing of global demand, according to an IHS Markit survey published on Tuesday .
More than five months of often violent street protests have hit the city's retail and tourism sector, with preliminary government data showing that the economy fell into recession for the first time in a decade in the third quarter.
Demand from mainland China fell to the fastest pace in the history of the survey, which began in July 1998, while companies also reduced purchases and inventories of inputs in the fastest since the series began moment, IHS said Markit
Hong Kong's private sector has been plunged into one of its worst recessions in the last two decades during October, and the latest PMI survey points to an increasingly deep economic malaise, said Bernard Aw, principal economist at IHS Markit.
As new orders continued to fall sharply, led by a record decline in demand from mainland China, companies became increasingly pessimistic about the outlook.
The Hong Kong Purchasing Manager (PMI) index adjusted for seasonality dropped to 39.3 in October, down from 41.5 in September and points to the worst deterioration since November 2008, during the global financial crisis.
A reading survey above 50 indicates expansion, while a figure below 50 denotes contraction.
Almost all the engines of growth in the Asian financial center stagnated during the summer when shops, shopping centers and restaurants closed to avoid clashes between riot police and protesters, while the commercial war between China and the United States intensified. Hong Kong is one of the most popular tourist destinations in the world and a bustling container port.
Protesters are angry at what they see as Beijing's grip on the precious freedoms of the city promised under a formula of one country, two systems when Britain returned it to Chinese rule in 1997.
The protests intensified in mid-June and show no signs of diminishing as protesters continue their calls for universal suffrage and an independent investigation into what they see as excessive police action, among other demands.
Police, who have sometimes fired rubber bullets and tear gas at demonstrators who drop petrol bombs, say they have shown moderation in the face of escalating violence.
(Report by Anne Marie Roantree; Kim Coghill Edition)