Business activity in Hong Kong grew in July at its slowest rate since March but companies appear to have gained some pricing power, the latest purchasing managers' index shows.
The seasonally adjusted Brunswick purchasing managers' index (PMI) stood at 52.75 in July, down from 52.81 in June but still marked a seventh straight month of economic expansion. A reading over 50 indicates an expanding private-sector economy.
Growth in new orders slowed from June, although business from mainland China accelerated and order volumes remained healthy.
Companies' overall input costs rose at their slowest pace in three months, reflecting weaker purchasing prices and slowing wage inflation.
At the same time, prices that companies were able to charge for their goods hit an eight-month high, and output price inflation exceeded input price inflation for the first time in 23 months, albeit only marginally.
"This suggests that the pricing power of some Hong Kong firms had improved from the previous month," the survey said.
Slower growth in new orders reduced order backlogs and slowed workplace expansion, the survey showed.
"Less than 7 percent of the executives from the 300 Hong Kong companies included in the survey noted a rise in backlogs of work compared with the previous month - down from just over 12 percent in June," the Brunswick PMI said.
Wage inflation was the weakest since January with less than 7 percent of survey respondents reporting a rise in average salaries from the previous month, down from 9 percent in June.
Companies were still hiring but the pace of employment growth slipped to a three-month low.
The PMI survey compares business conditions with a month earlier based on data from 300 private Hong Kong companies in manufacturing, services, retail and construction. The data is collected by NTC Research and Strategic Focus Hong Kong.
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