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China PMI contracts for a fourth-straight month

  • Author:naky
  • Source:www.diecastingpartsupplier.com
  • Release on:2015-07-01
Chinese manufacturing activity improved slightly in June, but still remained in contraction for the fourth consecutive month.
HSBC's 'flash' manufacturing PMI for June came in at 49.6, versus expectations of 49.4 and up slightly from a reading of 49.2 in May.
A reading above 50 indicates the sector is expanding, and the June figure means Chinese manufacturing activity has shrunk for a fourth consecutive month. That is the longest losing streak since the five-month period from January to May last year. February is the only month this year in which the sector grew, with a reading of 50.7.
Markit economist Annabel Fiddes said the preliminary PMI survey provided a mixed bag of data in June:
On the one hand, the sector shows signs of improvement as output stabilised amid a slight pick up in total new work, while purchasing activity also rose slightly over the month. On the other hand, manufacturers continued to cut their staff numbers, with the latest reduction the sharpest in over six years. This suggests that companies have relatively muted growth expectations as demand conditions both at home and abroad remain relatively subdued.
The continued loss of growth momentum during the June quarter as a whole may suggest that policy makers step up their efforts to stimulate growth and employment in the second half of this year, Ms Fiddes added.
China's official PMI readings for May showed the sector was marginally expanding, registering a reading of 50.2, having been 50.1 in April.
The HSBC survey is based on a much smaller sample of smaller, private companies (rather than state-owned blue chips) and tends to be more volatile than China's official release.
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