The IHS Markit Hong Kong Purchasing Managers' Index (PMI) fell to 43.5 in December from 50.1 in November, which was its first expansionary reading in 2-1/2 years. The 50-mark separates growth from contraction on a monthly basis.

A recent resurgence of COVID-19 cases around the world has caused delays in the transportation of shipping containers in many major markets, leaving China's manufacturing powerhouses without means of moving goods to their destinations.

"The hit to demand has also been exacerbated by record supply chain delays and rising costs, as the pandemic has reduced international transport capacity and led to logistics bottlenecks," said Chris Williamson, chief business economist at IHS Markit.

Shipping bottlenecks led to the highest incidence of supply chain delays since the data were first collected for the survey in 1998, the PMI showed.

(Reporting by Meg Shen; Editing by Sam Holmes)