HONG KONG -- The S&P Global Hong Kong SAR Purchasing Managers' Index posted 53.9 in February, up from 51.2 in January, indicating a faster expansion in the private sector, according to a report released on Friday.

This marked a second consecutive month of private sector expansion and at the most rapid pace since last May, according to the S&P Global report.

The expansion of Hong Kong Special Administrative Region's (HKSAR) private sector picked up midway through the first quarter, with companies reaping the benefits of easing COVID-19 restrictions. Higher demand boosted private sector output and led to increased hiring and buying activities in February. Meanwhile, supply constraints eased as suppliers' delivery time shortened while overall input cost inflation softened.

Amidst the improvement in business activities, business confidence rose to a record level, the report said.

"The Future Output Index, the only sentiment indicator, pointed to a record level of business confidence amongst Hong Kong SAR private sector firms, signaling the likelihood for continued improvements in business conditions in the near term," said Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence.

The report noted that sentiment in Hong Kong's private sector stayed positive midway through the first quarter with firms holding hopes for better economic conditions and sales ahead. The level of business confidence notably soared to the strongest since the series began in April 2012, reflecting improved views on business activities in the next 12 months.

The volume of new orders from the Chinese mainland also climbed at one of the quickest rates in the survey history. In turn, this supported a rapid expansion in private sector output, the quickest in 12 years, according to the report.