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Flash PMI indicates contraction in manufacturing
By Wang Yanlin |
July 21, 2011, Thursday
|
Online Edition
Online Edition
CHINA'S manufacturing activities in July may have contracted for the first time in one year, a preliminary reading of the HSBC Purchasing Managers' Index showed today.
The HSBC Flash PMI, the earliest available indicator of the industrial sector's operating conditions, settled at a 28-month low of 48.9 in July. The low was attributed to tighter monetary policies, higher production costs and dwindling overseas demand.
It fell below the reading of 50 - more than 50 indicates expansion and less than 50 means contraction - for the first time since July 2010. The reading compared with June's final HSBC PMI of 50.1 and 51.6 in May.
"Chinese manufacturing production declined at the fastest rate since March 2010," the bank said in a report, noting key component indices including output, new orders, new orders for export and employment all dropped below 50.
Qu Hongbin, chief economist for China at HSBC, said: "This flash PMI suggests slowing momentum in manufacturing, which implies that June's rebound in industrial production was temporary."
Qu said he expected industrial growth to decelerate in the coming months as tightening measures continue to filter through the economy.
The HSBC Flash PMI, the earliest available indicator of the industrial sector's operating conditions, settled at a 28-month low of 48.9 in July. The low was attributed to tighter monetary policies, higher production costs and dwindling overseas demand.
It fell below the reading of 50 - more than 50 indicates expansion and less than 50 means contraction - for the first time since July 2010. The reading compared with June's final HSBC PMI of 50.1 and 51.6 in May.
"Chinese manufacturing production declined at the fastest rate since March 2010," the bank said in a report, noting key component indices including output, new orders, new orders for export and employment all dropped below 50.
Qu Hongbin, chief economist for China at HSBC, said: "This flash PMI suggests slowing momentum in manufacturing, which implies that June's rebound in industrial production was temporary."
Qu said he expected industrial growth to decelerate in the coming months as tightening measures continue to filter through the economy.
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