In April, the global Hong Kong PMI fell to 48.6, the lowest in ten months.

Business sentiment in Hong Kong has been declining for two consecutive months. The April Hong Kong Purchasing Managers' Index (PMI) by S&P Global dropped further to 48.6 from 49.3 in March, reflecting continued weak business conditions and a faster contraction pace reaching the most severe in 10 months. Business output and new orders have decreased again, with the rate of reduction accelerating to the sharpest since July last year. Price increases have had a negative impact on business operations and customer orders. It is worth noting that due to the outbreak of war in the Middle East, raw material prices have soared, leading to the largest increase in overall input costs since November 2011. The survey shows that Hong Kong private enterprises have been reducing production for two consecutive months, with a deeper decline, although overall it is moderate, it is the largest since July last year. Inflation caused by the Middle East conflict has led to a sharp slowdown in the economy. Businesses have stated that new orders in early second quarter continue to decrease, with the contraction pace slightly easing compared to last month, overall still moderate. From the perspective of foreign trade, export orders have rebounded, while sales from the Chinese mainland have turned from growth to decline, marking the first decline in seven months. In terms of prices, overall input costs have soared to a 14-and-a-half-year high, with cost inflation driven by the sharp rise in raw material prices, resulting in high purchasing prices. However, employee compensation costs have also increased for nine consecutive months. To alleviate profit pressure, businesses have raised prices, with the largest increase since September 2023. With a decrease in new orders, backlogs of work in businesses have also decreased, as signs of overcapacity and weakening demand have emerged. Businesses have become more conservative in expanding their workforce, with the number of employees decreasing for the first time in three months, mainly due to companies not filling vacancies and cost-cutting measures. Businesses continue to actively procure, but the rate of increase in quantity has narrowed compared to the previous month. As raw material prices are likely to rise, businesses are stocking up on inputs, leading to a continuous increase in procurement inventories for 11 months. Suppliers have ample capacity, and supply performance has continued to improve. Regarding the outlook for the next year, Hong Kong private enterprises remain pessimistic, with sentiment slightly less pessimistic than the previous month but significantly negative overall. Businesses are concerned about intensified market competition and the increasing geopolitical risks triggered by the conflict in the Middle East.