China man­u­fac­tur­ing in­dex hits two-year low: sur­vey


A key gauge of Chi­nese man­u­fac­tur­ing ac­tiv­ity plunged to a twoyear low in July, an in­de­pen­dent sur­vey showed Mon­day, the latest data sug­gest­ing the world’s sec­ond-largest econ­omy faces down­ward pres­sure in the third quar­ter.

The fi­nal read­ing of Caixin’s Pur­chas­ing Man­agers’ In­dex (PMI) came in at 47.8 for the month, the main­land Chi­nese media group said in a joint state­ment with Markit, a fi­nan­cial in­for­ma­tion ser­vices provider that com­piled the sur­vey, down from a pre­lim­i­nary 48.2.

The fig­ure was be­low the 49.4 reg­is­tered in June and was the weak­est read­ing since 47.7 in July 2013, ac­cord­ing to pre­vi­ous data.

The in­dex, which tracks ac­tiv­ity in fac­to­ries and work­shops, is seen as a key barom­e­ter of the coun­try’s eco­nomic health.

A fig­ure above 50 sig­nals growth, while any­thing be­low in­di­cates con­trac­tion.

“July data sig­naled that the down­turn in China’s man­u­fac­tur­ing sec­tor in­ten­si­fied at the start of the third quar­ter,” Caixin and Markit said in the re­lease.

“Re­newed falls in both to­tal new work and new ex­port or­ders led man­u­fac­tur­ers to cut pro­duc­tion at the fastest rate since Novem­ber 2011.”

The re­sult, which missed a me­dian es­ti­mate of 48.3 in a sur­vey by Bloomberg News, came af­ter China an­nounced on Satur­day that its of­fi­cial PMI slowed fur­ther in July, de­cel­er­at­ing to 50.0 from 50.2 in June ac­cord­ing to main­land China’s Na­tional Bureau of Sta­tis­tics.

Caixin took over spon­sor­ship of the PMI sur­vey from Bri­tish bank­ing gi­ant HSBC from July.

“The weaker Caixin PMI, to­gether with a lower of­fi­cial PMI, sug­gests that growth mo­men­tum may have slowed slightly in July,” No­mura econ­o­mists said in a re­ac­tion.

The re­sults mean that China’s year-on-year in­dus­trial pro­duc­tion growth for last month may come in lower than their cur­rent es­ti­mate of 6.8 per­cent, they added. In­dus­trial out­put ex­panded 6.8 per­cent in June, an ac­cel­er­a­tion from May.

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