Business conditions in Hong Kong’s private sector deteriorated for a second straight month in April, as the conflict in the Middle East drove up fuel prices and intensified cost pressures on firms, a survey showed on Wednesday.
The S&P Global Purchasing Managers’ Index (PMI), a gauge of private-sector economic performance, fell to 48.6 in April from 49.3 in March, its lowest reading in 10 months. A figure below 50 indicates contraction from the previous month.
The index, compiled from a survey of purchasing managers at around 400 companies in the Hong Kong Special Administrative Region, pointed to renewed declines in output and new orders, with production shrinking at the fastest pace since June 2025.
“Firms commonly linked the latest deterioration in conditions to the war in the Middle East and its associated impact on prices, in particular for oil and fuels,” said Usamah Bhatti, an economist at S&P Global Market Intelligence.
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Overall cost pressures intensified at a pace not seen in over 14 years, contributing to the sharpest increase in prices since August 2023, Bhatti added.
Companies surveyed said rising prices had weighed on business activity and dampened customer demand.
Forward-looking indicators were also “downbeat”, Bhatti said, adding that backlogs of work — a bellwether for capacity constraints — fell for the second successive month, signaling that output could be cut further unless there is a pick-up in demand.
“The degree of pessimism around the year ahead remained marked on the back of greater uncertainty regarding the Middle East war and its impact on the global economy,” he noted.
