Manufacturing in decline as exports hit a slump
By Wang Yanlin |
September 4, 2012, Tuesday
|
Print Edition
Print Edition
Chinese manufacturing activities in private and export-oriented companies contracted at the sharpest pace in 41 months in August, an HSBC survey showed yesterday.
The HSBC Purchasing Managers' Index, a composite indicator of vitality slanted toward private and export-oriented companies, was 47.6 last month, down from 49.3 in July and the lowest since March 2009.
A reading below 50 is contraction, and it signaled a 10th straight month for the index to point at deceleration in manufacturing.
"The final reading of the HSBC PMI confirmed that China's manufacturing sector still faces intensifying downward pressure," said Qu Hongbin, chief economist for China at HSBC.
"New export orders contracting at the fastest pace in 41 months suggests China's exporters are facing increasing difficulties amid stronger global headwinds. It came together with a record high in stocks of finished goods and a 41-month low employment index," Qu said.
He said authorities must step up policy easing to stabilize growth and foster jobs.
The component indices showed new business falling at the sharpest rate in nine months, and jobs were lost for the sixth month in succession.
Average input costs also declined at the fastest pace in 41 months.
Performance at state-owned manufacturers was no better.
The official Purchasing Managers' Index, which is weighted toward large state-owned enterprises, edged down from July's 50.1 to 49.2 in August, a nine-month low and the first time it fell below 50 since November 2011, the China Federation of Logistics and Purchasing said on Saturday.
Zhou Hao, an economist at Australia and New Zealand Banking Group Ltd, said it was fresh evidence of China's continued decelerating growth.
ANZ yesterday officially downgraded its estimate of China's economic growth this year to 7.8 percent from a previous 8.2 percent.
But performance at service companies seemed to be bucking the trend.
The official non-manufacturing Purchasing Managers' Index rose 0.7 points from a month earlier to 56.3 in August.
China's gross domestic product expanded 7.6 percent from a year earlier in the second quarter, the slowest in three years.
Chang Jian, an economist at Barclays, said falling PMIs in August suggested growth likely slowed further in the third quarter.
"The counter-seasonal declines in both the official and HSBC PMIs support the view that China's economic growth has likely slowed further in the third quarter," Chang said, who projected a full-year growth of 7.9 percent.
Chang said unemployment was the key indictor to watch for possible government action, and he expected more policy easing in the coming months to stabilize growth, which has to cope with slowing external demand, a deflating of infrastructure and property bubbles, and the absorption of overcapacity.
The HSBC Purchasing Managers' Index, a composite indicator of vitality slanted toward private and export-oriented companies, was 47.6 last month, down from 49.3 in July and the lowest since March 2009.
A reading below 50 is contraction, and it signaled a 10th straight month for the index to point at deceleration in manufacturing.
"The final reading of the HSBC PMI confirmed that China's manufacturing sector still faces intensifying downward pressure," said Qu Hongbin, chief economist for China at HSBC.
"New export orders contracting at the fastest pace in 41 months suggests China's exporters are facing increasing difficulties amid stronger global headwinds. It came together with a record high in stocks of finished goods and a 41-month low employment index," Qu said.
He said authorities must step up policy easing to stabilize growth and foster jobs.
The component indices showed new business falling at the sharpest rate in nine months, and jobs were lost for the sixth month in succession.
Average input costs also declined at the fastest pace in 41 months.
Performance at state-owned manufacturers was no better.
The official Purchasing Managers' Index, which is weighted toward large state-owned enterprises, edged down from July's 50.1 to 49.2 in August, a nine-month low and the first time it fell below 50 since November 2011, the China Federation of Logistics and Purchasing said on Saturday.
Zhou Hao, an economist at Australia and New Zealand Banking Group Ltd, said it was fresh evidence of China's continued decelerating growth.
ANZ yesterday officially downgraded its estimate of China's economic growth this year to 7.8 percent from a previous 8.2 percent.
But performance at service companies seemed to be bucking the trend.
The official non-manufacturing Purchasing Managers' Index rose 0.7 points from a month earlier to 56.3 in August.
China's gross domestic product expanded 7.6 percent from a year earlier in the second quarter, the slowest in three years.
Chang Jian, an economist at Barclays, said falling PMIs in August suggested growth likely slowed further in the third quarter.
"The counter-seasonal declines in both the official and HSBC PMIs support the view that China's economic growth has likely slowed further in the third quarter," Chang said, who projected a full-year growth of 7.9 percent.
Chang said unemployment was the key indictor to watch for possible government action, and he expected more policy easing in the coming months to stabilize growth, which has to cope with slowing external demand, a deflating of infrastructure and property bubbles, and the absorption of overcapacity.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
