This July 25, 2019 photo shows the skyline featuring financial buildings in Hong Kong. (PAUL YEUNG / BLOOMBERG)

Hong Kong’s private sector economy contracted at a slower pace in September than in August as the easing of some social distancing restrictions boosted certain business activities but wasn’t sufficient to spark an overall increase, an IHS Markit survey showed on Wednesday. 

The seasonally adjusted IHS Markit Hong Kong Purchasing Manager’s Index (PMI) rose to 47.7 in September from 44.0 in August, the highest in three months. A level below 50 indicates a decline in private sector business activities.

The seasonally adjusted IHS Markit Hong Kong Purchasing Manager’s Index (PMI) rose to 47.7 in September from 44.0 in August, the highest in three months

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IHS Markit principal economist Bernard Aw said in a release announcing the September report that Hong Kong’s private sector moved closer to stabilization at the end of the third quarter, with business activity and new orders both falling at softer rates.

The city’s employment rose for the first time since June, with data indicating job creation in such sectors as food services and computer and information services, the survey showed. While business confidence remained negative, the degree of pessimism was the least for over a year, the survey showed.

While the government extended the time period for social distancing requirements to fight the COVID-19 pandemicin the third quarter, it relaxed some, such as the number of diners at one table in a restaurant, resulting in the uptick in some business activities.

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“Nevertheless, the average PMI for the third quarter was only modestly higher than the second quarter: a rise from 43.5 to 45.4, hinting that the Hong Kong economy will continue to face formidable challenges in the months ahead,” Aw said in the release. He added that the uncertainty surrounding the pandemic trajectory remains a key concern in the absence of an effective vaccine.