Hong Kong's Economic Pain Set to Deepen as Protests Intensify

(Bloomberg) -- The earliest indicator of Hong Kong’s economy for the second half of 2019 signals that conditions are set to deteriorate in the city as protests disrupt local businesses.

Hong Kong’s July whole economy purchasing managers’ index plunged to 43.8 in July from 47.9 the previous month, the lowest reading since March 2009, as output and new orders both fell, according to IHS Markit. A reading below 50 signals contraction.

The data signals weaker confidence in the local economy as protests that began in June continue to weigh on tourism and retail sales, complicating efforts to survive the bruising U.S.-China trade war. Financial institutions including Bank of America Merrill Lynch have cut forecasts for Hong Kong’s gross domestic product growth for 2019.

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