A private survey showed Wednesday that the business activity of the Hong Kong Special Administrative Region (HKSAR) dropped sharply in February as the outbreak of the novel coronavirus added to economic woes originally caused by social unrest and lackluster global trade.
The headline Purchasing Managers' Index (PMI) of IHS Markit slumped to 33.1 in February from 46.8 in January, the London-based consulting firm said in a monthly report.
The report said PMI data showed that business conditions deteriorated at the steepest pace since the survey began in July 1998 in part due to the impact from the epidemic on the private sector economy.
The Hong Kong economy witnessed negative growth in 2019 after suffering from double blows of global economy and trade and escalating local violent incidents. The epidemic has further weighed down economic activity since the beginning of the year.
Bernard Aw, the principal economist at IHS Markit, said the latest PMI flashed red warning lights on the dire private sector conditions and the average PMI so far for the first quarter points to a deepening recession, raising the urgency for policy support.
To cope with the difficulties, the HKSAR government has set up an anti-epidemic fund worth 30 billion Hong Kong dollars (3.85 billion U.S. dollars) and announced more than 120 billion Hong Kong dollars (15.4 billion U.S. dollars) of counter-cyclical measures in the newly released budget to stimulate economic development and relieve people's hardship.