China’s Manufacturing Slows in June

manufacturing

China’s Manufacturing Slows in June

 

China’s manufacturing slowed to a four-month low in June.

China’s manufacturing Purchasing Manager’s Index (PMI) that gauge state-owned companies dropped from 50.1 in May to 50 in June, and non-manufacturing PMI surged to 53.7, compared with 53.1 in May.

While the labor market components of both PMI gauges decreased, with employment in the manufacturing sector falling to 47.9 and the non-manufacturing reading dropped to 48.7.

Reading from Caixin Media and Markit Economics also fell to 48.6 in June from 49.2 in May. Numbers above 50 indicate improving conditions.

Factory production remains weak as global outlook continues to weigh on growth — suppressed by Britain exit from the European Union, while non-manufacturing sector was aided by the increase in domestic demand for services — ranging from lunches to cinema tickets.

“The economic growth in the next few months will still be led by the government, by infrastructure,” said Xu Gao, chief economist at Everbright Securities Co. in Beijing. “The People’s Bank of China will be very cautious.”

“It means that things are still holding up. That, I think, is a reassuring message,” Julia Wang, an economist with HSBC Holdings Plc. in Hong Kong, said in a Bloomberg Television interview. “There’s also an element of really poor global demand, and that’s not really changing any time soon. That justifies more fiscal stimulus, at least in the short term.”

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years experience as a foreign exchange research analyst and trader.

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