What’s new: Hong Kong’s private sector shrank for the first time since January 2021, as the ongoing Covid-19 outbreak dampened new orders and output, according to an economic activity survey.
The IHS Markit Hong Kong SAR Purchasing Manager’s Index fell to 48.9 in January from December’s 50.8, entering contractionary territory of below 50 after expanding for 11 consecutive months.
A surging number of Covid-19 infections affected both local and foreign demand, causing private sector firms to reduce their quantity of purchases and lower inventory levels, index compiler IHS Markit Ltd. said Tuesday. Employment levels, however, rose slightly in January.
There were also supply issues owing possibly to shipping delays due to Covid-19 restrictions, the survey found. Suppliers’ delivery times, thus, lengthened at a sharper rate in January.
The background: Hong Kong is trying to contain what its leader Carrie Lam said is the city’s worst Covid-19 outbreak in two years, ordering strict social-distancing rules and ramping up testing and quarantining. No gathering of more than two households is allowed in private places, and no more than two people can gather in public, Lam said at a Tuesday briefing.
The latest wave of outbreaks in Hong Kong started in December. On Wednesday, the city reported 1,161 new cases, the majority of them locally infected.
Contact reporter Zhang Yukun (yukunzhang@caixin.com) and editor Bertrand Teo (bertrandteo@caixin.com)
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