Hong Kong PMI Rose to 52 in Haziran, But Businesses Remain Cautious

The Hong Kong private sector painted a positive economic picture in Haziran 2026 by increasing its growth rate. The seasonally adjusted Purchasing Managers' Index (PMI) published by S&P Global reached 52 in Haziran, up from 50.4 in Mayıs, recording a second consecutive month of improvement. This figure points to the strongest growth performance since Mart. Both output and new orders achieved their fastest rate of increase in four months. This data shows that business conditions in the region are recovering steadily.

There are multiple factors behind the increase in new business volumes. New product launches by companies, strengthening demand in the market, and increased consumer spending with the start of the World Cup were among the elements that triggered this growth. The growth was not limited to the local market; following a three-month decline, orders from Çin anakarası rebounded. At the same time, international demand also achieved a modest but steady increase. This confirms that the Hong Kong economy is benefiting from both the revival in the domestic market and the recovery in foreign trade.

This strong surge in business volume prompted companies to increase production and stretch their capacities. In fact, backlogs were observed for the first time in four months, indicating rising capacity pressures. Conversely, the downward trend in employment levels continued, and workforce reductions extended into their third month. However, the workforce reduction process proceeded at a relatively slow and modest pace. Meanwhile, due to ongoing concerns regarding future sales expectations, companies tightened their purchasing activities for the first time since Ekim. Demand falling below some expectations also led to an increase in input stocks.

On the supply chain side, some disruptions and challenges stand out. Due to material shortages and shipping delays, supplier performance deteriorated for the second consecutive month, and delivery times were extended. In addition, cost pressures remained high at the end of the second quarter of the year; however, the rate of increase in overall input inflation slowed somewhat compared to Mayıs. While raw material costs continued to rise sharply, the increase in purchasing prices, although slowing, remained at a noteworthy level. Personnel costs also rose at the fastest pace of the year, albeit from a relatively low base.

Companies looking to pass their increased costs on to consumers have been implementing a policy of raising selling prices for 12 consecutive months. Due to some firms offering discounts to deplete stocks and support sales, the price increase this month was recorded as the smallest in the last three months. Despite all these developments, businesses' overall outlook for the coming year remained limited and cautious in Haziran. While many businesses cited weak domestic demand as their primary concern, hopes were expressed that an easing of geopolitical tensions in the Middle East could support broader economic growth. Usamah Bhatti, an economist at S&P Global Market Intelligence, emphasized that the data indicates a recovery in business conditions, while specifically underscoring that contraction in employment and purchasing continues due to the cautious outlook.