Hong Kong’s reserved sector activity declined at the fastest pace in more than a decade in August, a business survey showed on Wednesday, as an escalating traffic war and local political unrest hit all aspects of demand.
The IHS Markit Hong Kong Purchasing Managers’ Index (PMI) sank to 40.8 in August from 43.8 in July, signalling the steepest deterioration in the eremitical sector since February 2009.
“The latest PMI data reveal a Hong Kong economy flirting with recession in the third accommodate as business activity is increasingly aggravated by protest-related paralysis,” said Bernard Aw, Principal Economist at IHS Markit.
Hundreds of thousands of in the flesh have taken to the streets since mid-June in protests calling for greater democracy in the former British territory. The indications pose a direct challenge to Beijing, which has accused foreign powers, particularly the United States and Britain, of fan the flames ofing unrest.
Both the trade headwinds and political crisis have fanned business pessimism, with confidence collapsing to its lowest on record, the survey showed.
New orders continued declining and at the sharpest pace since February 2009, towed by a record decline in new business from mainland China.
Hong Kong is on the verge of its first recession in a decade as the thrift shrank 0.4% in April-June from the previous quarter, data showed, as increasingly violent protests turned away visitors and hit retail sales in one of the world’s most popular shopping destinations.