Hong Kong Business Activity At Three-Year High

by Mary Swire, Tax-News.com, Hong Kong

06 October 2003

Encouraging news was received on the Hong Kong economic front last week after it was revealed that business activity improved for the fourth consecutive month to reach its highest point for three years.

The purchasing managers index (PMI) which is a leading indicator of economic growth, increased to 54.8 in September (seasonally adjusted) growing from 53.5 in August. A figure over 50 means that the economy is expanding, and last month's figure is the highest since June 2000.

"All 10 component indices of the PMI reported gains across the board - a clear indication of improvement in business confidence and outlook," Chartered Institute of Purchasing and Supply deputy chairman Paul Ng told The Standard.

According to UK-based firm NTC Research who compile the PMI figures, September's result reflects encouraging growth in the manufacturing sector with construction, retail and services also registering a pick up in activity.

Despite the city's economy declining by 0.5% in the second quarter of 2003, the Asian Development Bank is forecasting 2.1% GDP growth for the year, followed by 4.8% growth in 2004, no doubt encouraged by recent developments such as the conclusion of the trade pact with China and a boost in tourist visitors with the SARS crisis firmly behind the city.

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