Hong Kong’s private sector expanded in May at the fastest pace in more than a decade as the city gradually eased its toughest Covid restrictions and a severe outbreak receded.
The S&P Global Purchasing Managers’ Index rose to 54.9 in May, up from 51.7 in April. It was the second straight month of expansion after three months of contraction to start the year as the government’s strict social distancing curbs impacted economic growth. A reading above 50 signals expansion, while anything below indicates contraction.
New order growth accelerated in May, driving hiring and purchasing activity expansion, according to S&P Global. The rate of growth was the sharpest since March 2011, the firm said.
“Despite the unleashing of pent-up demand with the easing of virus restrictions, price and supply pressures showed no signs of worsening, which had been a positive sign,” said Jingyi Pan, economics associate director at S&P Global Market Intelligence, in a statement accompanying the data release.
She added the data suggests Hong Kong’s economy is “recovering strongly into the second quarter,” though pointed out that demand from China remained under pressure. The economy contracted in the first quarter for the first time in more than a year on local Covid
restrictions and a severe hit to trade spurred by China’s omicron outbreak.
Hong Kong has eased many of its restrictions since April, though Covid
cases are beginning to climb again. The city on Sunday reported infections had reached a six-week high amid a growing cluster that originated at a group of nightclubs.