Hong Kong demonstrates economic recovery in January with a two-month high PMI

Hong Kong’s economy showed signs of acceleration at the beginning of the year. According to recent data, the region’s Purchasing Managers’ Index (PMI) rose to 52.3 in January, an increase of 0.4 points month-over-month. This indicator reflects positive momentum in Hong Kong’s business environment, where the index has remained above the critical 50 mark for six consecutive months.

Expansion of business activity supported by a flow of new orders

The main driver of Hong Kong’s PMI growth is a significant acceleration in new order inflows, according to S&P Global analysts. Notably, export contracts reached their highest level in nearly three years, indicating a revival of international demand for Hong Kong goods and services. The expansion of the export base reflects broader global sales growth trends despite the volatility in world trade.

Along with increased order volumes, regional companies have become more active in procurement activities. The rise in backlogged orders encourages companies to increase material purchases, creating favorable conditions for further production expansion during the first quarter.

Price pressures, but adjustments remain restrained

Although raw material costs have risen significantly, Hong Kong companies have adopted a cautious approach to pricing. According to RTHK, businesses have adjusted their product prices, but the pace of this increase has slowed, indicating a reluctance to fully pass costs onto consumers in a competitive market environment.

Uncertainty of risk factors limits optimism

Despite positive business activity indicators, Hong Kong companies remain cautious in assessing their prospects. Uncertainty surrounding U.S. trade policies, intensified market competition, and slowing global economic growth pose significant challenges for local enterprises. These external factors could notably impact production figures in the coming months.

At the same time, some companies express confidence in the stability and sustainable development of Hong Kong’s economy. This dual approach—optimism about current indicators combined with caution regarding long-term prospects—characterizes a cautious but not pessimistic stance within the regional business community.