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Hong Kong's private sector contracted further in June, with declines in business activity and export orders from mainland, survey data from IHS Markit showed on Thursday.
The Purchasing Manager's Index rose to 47.9 in June from 46.9 in May. A score below 50 indicates contraction in the sector.
The US-China trade war tensions and recent large-scale local protests held back orders in June, the survey reported.
Orders from mainland China declined at the fastest rate in over three-and-a-half years. Backlogs of work and lower sales led the firms to cut back output.
Business activity declined for the fifteenth straight month and the number of staffs was reduced. The purchasing activities were cut down by the firms, which led to the fall in holdings input materials.
On the price front, input costs rose at a faster rate than in May, but marking below the historical average and output costs rose only marginally. Costs for raw materials and wages increased in June.