Stimulus helps PMIs post best showing
Print Edition
CHINA’S manufacturing sector performed at its best this year in June as stimulus measures and stronger demand helped stabilize growth in the world’s second-largest economy, two surveys showed yesterday.
The official Purchasing Managers’ Index, a comprehensive gauge of operating conditions in China’s state-owned industrial enterprises, rose to 51 last month from 50.8 in May, said the China Federation of Logistics and Purchasing.
Meanwhile, the HSBC PMI, which is slated toward private and export-oriented manufacturers, rose to 50.8 in June from 49.4 a month earlier, according to HSBC Holdings Plc and research firm Markit.
A reading above 50 means growth, and it was the first time that both PMIs were above that level since last December.
Zhao Qinghe, a senior analyst at the National Bureau of Statistics, said China’s manufacturing sector has stabilized along with the country’s economy.
“China has launched quite a lot of targeted stimulus measures this year,” Zhao said. “They helped bolster growth, which was reflected in the latest PMI reading.”
The components in the official PMI, which hit a six-month high in June, showed new orders at 52.8 were at their strongest since last October. Production added 0.2 percentage points from a month earlier to 53, the best among all sub-indices.
This was the fourth monthly rise for the official PMI, a widely watched indicator of China’s economy.
Qu Hongbin, chief economist for China at HSBC, said the readings confirmed the stronger demand and a faster drop in inventory.
“The economy continues to show more signs of recovery, and this momentum will likely extend into the next few months, supported by more infrastructure investments,” Qu said.
But he warned downside risks from a slowing property market may weigh on growth in the second half of this year.
“We expect both fiscal and monetary policies to remain accommodative until the recovery is sustained,” Qu said.
China’s banking regulator said on Monday that it would ease lending curbs for commercial banks by adjusting the calculation of the loan-to-deposit ratio.
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