Core Insights - The Hong Kong Purchasing Managers' Index (PMI) decreased to 50.4 in September from 50.7 in August, indicating a slight decline in the expansion of the business environment, although it remains in the expansion zone for two consecutive months [1] Economic Activity - Economic activity in Hong Kong grew slightly compared to August, marking the highest level since December of the previous year [1] - New orders have seen a slight reduction for two consecutive months, with a significant drop in new orders from mainland China and overseas markets in Q3, reflecting weakened export trade demand [1] Business Sentiment - The business atmosphere in September stabilized, with companies generally maintaining a pessimistic outlook, although the level of pessimism is the lowest since December 2023 [1] - Respondents indicated that U.S. trade policies and global economic uncertainties are undermining business confidence, but local economic improvements have fostered some optimism, partially offsetting negative views [1] Employment and Orders - The expansion of economic activity in September occurred at the fastest pace in ten months, with the decline in new orders remaining consistent with August, and employment levels remained largely unchanged [1] - However, the decline in order demand is significant, with the overseas market experiencing the largest drop in three and a half years [1] Cost Pressures - Overall input costs have risen close to the largest increase in two years, driven by rising raw material prices and labor costs, indicating increased inflationary pressures [1]

Core Insights - The July Purchasing Managers' Index (PMI) data indicates a slight decline in China's manufacturing and non-manufacturing sectors, reflecting economic pressures [1][3][4] Manufacturing Sector - The manufacturing PMI for July is reported at 49.3%, a decrease of 0.4 percentage points from the previous month, indicating contraction [1][3] - The production index and new orders index are at 50.5% and 49.4%, respectively, showing a decline of 0.5 and 0.8 percentage points, suggesting a slowdown in market demand [5] - Despite the decline, the manufacturing sector shows resilience with high-tech and equipment manufacturing PMIs remaining above the critical point [5] Non-Manufacturing Sector - The non-manufacturing business activity index stands at 50.1%, down 0.4 percentage points from June, but still above the critical threshold [1][6] - The service sector remains stable, with a business activity index of 50.0%, slightly down by 0.1 percentage points [6] - The summer holiday effect positively influences service-related sectors such as transportation and entertainment, with indices exceeding 60.0% [6] Economic Outlook - Experts suggest that the fluctuations in the manufacturing PMI are primarily due to short-term factors, and the foundation for economic recovery remains solid [4] - The construction sector is experiencing a slowdown due to adverse weather conditions, but is expected to rebound as the rainy season ends [6][7]

Group 1 - The Hong Kong private sector is experiencing a further contraction, with the S&P Global Hong Kong Purchasing Managers' Index (PMI) dropping from 49 in May to 47.8, marking the largest decline since April 2022 [1] - New orders for businesses have decreased for five consecutive months, attributed to tight customer budgets and uncertainty in U.S. trade policies, leading to a significant reduction in business activity [1] - The production output has seen its most notable decline in a year, as both domestic and overseas business volumes have sharply reduced compared to May [1] Group 2 - Companies are cautiously managing employee recruitment due to concerns about business prospects, with pessimism among businesses reaching its highest level since September 2020 [1] - Input costs have risen, but the increase is the smallest since February 2021, with wage inflation slowing down helping to suppress cost increases [1] - The overall business confidence has dropped to its lowest level in nearly five years, raising concerns about the future performance of the sector [2]