The Hong Kong Special Administrative Region's seasonally adjusted Purchasing Managers' Index (PMI) rose to 51.2 in October, indicating private sector expansion for the third consecutive month, according to S&P Global.

Up from 50.4 in September, the October figure reflects the strongest growth rate since Nov 2024, S&P Global said in a report.

The PMI has now remained above the 50-point threshold, which separates expansion from contraction, since August.

The report revealed that private enterprises saw an increase in new orders in October for the first time in nine months. Improved customer confidence and stabilizing demand from both local markets and the Chinese mainland contributed to a rebound in overall sales.

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However, new export orders continued to decline amid a sluggish global economy and the lingering effects of US trade tariffs. Notably, new orders from the mainland recorded their first increase in a year, partially offsetting the weakness in overseas demand.

Despite the uptick in orders, backlogs of work fell for the tenth straight month, indicating that firms still have excess capacity.

In response to sales, businesses increased their purchasing activity for the first time since January, though employment growth remained modest.

Overall input cost growth slowed as wages rose steadily, but rising raw material prices pushed up purchase costs, the report added.

Companies raised prices for the fourth consecutive month, with the largest increase in a year.