Hong Kong March PMI plunges to five-month low

The HSBC Hong Kong Purchasing Managers Index fell to 50.5 in March from 51.2 in February due to weak output growth and higher input costs. HSBC Holdings Plc said the reading remained above 50, indicating manufacturing activity continued to expand. A reading below 50 signals contraction.

HSBC Greater China economist Donna Kwok said businesses in Hong Kong finished the first quarter on a solid footing, with output and new orders expanding.

“The economy's fundamentals look good for further growth this year, although alongside reviving inflationary pressures.

"As loose liquidity conditions continue to fuel asset price growth, the biggest challenge for policy makers will be to strike a balance between growth and inflation concerns," Kwok said.

The HSBC PMI is based on a survey of about 300 companies prepared by Markit Economics.