TOKYO -- Hong Kong's private sector dipped again in August as export sales to China continues to fall amid escalating trade tensions. Business confidence remained pessimistic about future output, with confidence falling to the lowest since the end of 2016.
The Nikkei Hong Kong Purchasing Manager's Index, or PMI, rose from 48.2 in July to 48.5 in August, but stayed below the 50-point line separating expansion from contraction.
Both output and new orders declined further, obliging firms to reduce selling prices to support sales despite a continuous rise in input costs.
"The current sequence of deteriorating business conditions is the longest since the end of 2016," commented Bernard Aw, Principal Economist at IHS Markit, which compiles the survey. "Survey evidence suggested that the key concern of Hong Kong's private sector businesses was the adverse impact on economic activity from rising US-China trade frictions."
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