The HSBC purchasing managers index for Hong Kong, which indicates changes in the economy's business conditions, rose to 55 points in December, up from 53.5 points in the previous month. It was the fifth consecutive rise in the index since last July, when the indicator marked its lowest point in 12 months.
A PMI above 50 indicates an increasing rate of economic growth. "The rate of growth was above the long-run average for the series, pointing to a strong finish to the year," said HSBC,
The bank reported a sharp increase in incoming new business received by companies in December, the 18th consecutive month in which an increase in work intake was recorded. "New orders received from mainland China also increased," HSBC reported. "The latest rise weakned from the five-month high posted in November, but remained marginally stronger than the long-run series average."
Inflationary pressures may be emerging, however. Hong Kong companies reported significantly higher overall input costs, driven by both purchase prices and staff costs. Wages rose markedly in December at a rate higher than the historical average. "The momentum in Hong Kong's economy is showing no signs of easing as 2010 drew to a close," said Mark McCombe, Chief Executive of HSBC in Hong Kong. But the issue of inflation "should be monitored closely," he added.
MORE ARTICLES ON PURCHASING MANAGERS INDEX