HK business confidence falls to its lowest in 11 yrs
Trade war, five months of protests exerting pressure on city’s economy
HONG KONG—HONG Kong’s economic woes showed no sign of easing on Wednesday after a key measure of business confidence fell to its lowest level in more than a decade as the city reels from the global trade war and violent democracy protests.
The Purchasing Managers’ Index (Pmi)—which measures the health of the private sector—dropped to 39.3 in October, its worst reading since 2008 during the global financial crisis, heaping fresh misery on the unrest-plagued city.
The international financial hub has been plunged into a recession by the fallout from the China-us trade war and five months of seething prodemocracy protests that Beijing has taken a hardline approach against.
IHS Markit, which surveys around 400 private companies to build the PMI data set, said business activity was now falling at its fastest rate on record. The latest reading is well below the 50 level that separates growth from contraction and is also sharply down from the 41.5 in September.
“The ongoing political unrest and impact of trade tensions saw business activity fall at the sharpest pace since the survey started over 21 years ago,” Bernard Aw, principal economist at IHS Markit, wrote.
“Anecdotal evidence revealed that the retail and tourism sectors remained particularly affected,” Aw said, adding that the city was experiencing a record decline in demand from mainland China.
Hong Kong’s economy was already facing strong headwinds at the start of 2019 as it was hit by the trade war.
In the first quarter, the city was growing at a lackluster 0.6 percent. But the protests that erupted in June only made matters worse.
Figures released by the government last week showed gross domestic product shrank 3.2 percent in the third quarter compared with the previous three months, when it saw a 0.4-percent drop.