Business growth in Hong Kong’s private sector expanded at its fastest pace, hitting a four-month high, in June as increased consumer spending during the World Cup supported sales, a survey showed on Monday.
The S&P Global Hong Kong SAR Purchasing Managers’ Index (PMI) rose to 52.0 in June from 50.4 in May, marking a second consecutive monthly improvement and the strongest reading since February. A PMI reading above 50 indicates expansion from the previous month.
The survey attributed the quickened improvement to stronger rises in output and new business. Firms that were interviewed said new product launches, improved client demand and greater spending during the World Cup, which kicked off on June 11 and will culminate in the final on July 19, had boosted sales.
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Buoyant demand pushed firms to record a rise in work backlogs for the first time since February, causing capacity pressures amid a further reduction in employment.
“The PMI data for June showed that business conditions improved at the end of the first half of 2026,” said Usamah Bhatti, an economist at S&P Global Market Intelligence.
“The boost to sales appeared broad-based, with demand from both the Chinese mainland and international markets increasing in June,” he added.
However, Bhatti cautioned that employment and purchasing trends remained subdued. Employment fell for a third consecutive month, and firms reduced input buying for the first time since last September due to concerns around demand outlook.
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The index, compiled from a survey of purchasing managers from around 400 companies in Hong Kong, also showed that firms partially passed on higher expenses to customers, raising prices for 12 straight months, though the overall charge inflation remained modest as input costs rose at a softer but still strong pace and staffing costs hit a 2026 peak.
The outlook for business activity remained downbeat amid subdued local demand, although it turned milder based on hopes of de-escalation in the Middle East, the survey found.
The index was released after Hong Kong’s inflation accelerated in May, when overall consumer prices increased by 2 percent year-on-year, up from a 1.7 percent rise in April.
In a separate report released on Monday, Dah Sing Bank said Hong Kong’s small and medium-sized enterprises (SMEs) are facing a “triple squeeze” of rising costs, weakening demand and interest rate fluctuations.
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At the same time, outbound consumption continues to affect business revenues, reflecting the local business environment is entering an adjustment phase, the lender added.
Despite the multiple challenges, Dah Sing Bank Deputy Chief Executive Phoebe Wong said it is encouraging to see businesses actively adopting measures such as optimizing cost structures and enhancing customer experience, emphasizing that “in an environment of heightened uncertainty, stable cash flow and operational agility has become even more important.”
Frank Feng contributed to the story.
