S&P Global Hong Kong February PMI Falls to 49, hitting an 8-month low

Standard & Poor's has announced that the Hong Kong Purchasing Managers' Index (PMI) for February fell to 49 after seasonal adjustment, lower than January's 51, the lowest in 8 months, reflecting a deterioration in the business environment for the first time since September last year. Business activities contracted for the first time in 5 months, with new orders showing a decline again due to a decrease in demand caused by rising prices of goods and services, as well as concerns over tariffs which have lowered export demand. Among them, the manufacturing sector saw the largest declines in new orders and output. In February, companies laid off workers, partly due to concerns about the economic outlook, including intensified competition, rising costs, and unclear US policies, leading to the most pessimistic sentiment in a year and a half. Average input costs reached their highest level since November last year, driven by wage increases. With rising costs, companies raised prices for the first time in 3 months, but the increase was moderate. Survey agencies indicate that forward-looking data such as the new orders index and output expectations index suggest that business operations will contract further in the coming months; overall business confidence will require more policy support. The business sentiment is soft, squeezing the space for companies to raise prices, leading to a decrease in profits.