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Business Activity Increases in Hong Kong

Reuters
Monday, 1 Jan 2007 | 9:02 PM ET

Business activity in Hong Kong expanded at its sharpest pace since April 2000 in December, propped up by a surge in new orders driven by strong demand from mainland China, a purchasing managers' index showed on Tuesday.

The Hong Kong purchasing managers' index rose to a seasonally adjusted 57.4 in December from 56.3 in November.

A booming financial services sector is helping drive the economy as Hong Kong's stock market -- which gained 34 percent in 2006 and ended the year just a whisker below its all-time high -- attracted the world's biggest initial public offerings this year.

The index, put together by NTC Economics Ltd., posted a 24th consecutive month of growth. A reading above 50 indicates growth in private sector activity.

Business activity has now accelerated for four straight months -- boding well for the city's economy and suggesting that an expected slowdown in exports in coming months could be less severe than expected.

The index surveyed 300 private Hong Kong companies in manufacturing services, retail and construction.

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