The headline seasonally adjusted S&P Global Hong Kong Purchasing Managers' Index (PMI) rose to 49 in May, from 48.3 in April, signaling the softest deterioration in the health of the private sector economy for 3 months and one that was only mild.

Business activity across the private sector decreased for the second successive month during May, but the rate of decline was unchanged from the marginal pace seen in April. All four monitored segments recorded lower activity levels, led by a steep fall in manufacturing production.

Moreover, new orders meanwhile decreased at a marginal pace, with the rate of decline easing sharply from that seen in April. Survey respondents often mentioned that the pause on US tariff hikes had helped to support sales at some firms, but also pointed to a subdued domestic demand environment overall. Export sales fell at a softer but still solid rate, while demand from Mainland China broadly stabilized.