Weaker United States, main­land PMI a cause for con­cern

The China Post - - BUSINESS INDEX & -

The latest man­u­fac­tur­ing data from main­land China and the United States should be a cause for con­cern, es­pe­cially for coun­tries where trade re­mains a vi­tal sup­port for the econ­omy.

Among ASEAN economies, not only Malaysia, but Sin­ga­pore, Thai­land and In­done­sia have been af­fected by the global head­winds.

A Chi­nese slow­down would im­pact Malaysia and Sin­ga­pore, with their vi­tal links via the man­u­fac­tur­ing sup­ply chain and goods trade.

The Caixin pur­chas­ing man­agers’ in­dex (PMI) for Au­gust, re­leased on Fri­day, has con­tracted for six straight months and has fallen to the low­est in more than six years.

The Caixin PMI, a gauge of Chi­nese fac­tory ac­tiv­ity, cov­ers medium-sized man­u­fac­tur­ers.

The PMI cov­ers fac­tors such as in­ven­tory, new or­ders and pro­duc­tion.

From the PMI, an­a­lysts can gauge not only eco­nomic growth but also ex­ports.

The of­fi­cial man­u­fac­tur­ing PMI, due at the end of the month, slipped to the bor­der­line 50 in July, from 50.2 in June.

Main­land China’s of­fi­cial PMI cov­ers the larger man­u­fac­tur­ers. A read­ing above 50 on the in­dex in­di­cates growth, while a read­ing be­low that in­di­cates a de­cline in ac­tiv­i­ties.

Mean­while, the PMI data from Europe shows that man­u­fac­tur­ing ac­tiv­ity con­tinue to ex­pand although afer sev­eral years of tur­bu­lence.

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