ecns [expanded by feedex.net]: HSBC China PMI flash dips to nine-month low in June

ecns [expanded by feedex.net]

ecns

HSBC China PMI flash dips to nine-month low in June
http://www.ecns.cn/business/2013/06-20/69374.shtml
Jun 20th 2013, 06:41



2013-06-20 15:41 Caijing Web Editor: yaolan


China's manufacturing activity decelerated further in June due to weak demand, sinking into a nine-month low, a preliminary survey showed.


The flash reading of HSBC China Purchasing Manager's Index fell to 48.3 in June, worse than the final reading of 49.2 in May when the index moved into the contractionary territory for the first time in seven months.


A reading above 50.0 indicates expansion while a reading below 50.0 indicates contraction.


"The HSBC China Flash Manufacturing PMI drooped to a nine-month low of 48.3 in June, following on the sequential reduction in both production and demand. Manufacturing sectors are weighed down by deteriorating external demand, moderating domestic demand and rising destocking pressures," said Qu Hongbin, chief China economist at HSBC.


"Beijing prefers to use reforms rather than stimulus to sustain growth. While reforms can boost long-term growth prospects, they will have a limited impact in the short term. As such we expect slightly weaker growth in Q2," he added.


The sub-index of overall new orders dropped to 47.1 in June, the lowest reading in 10 months, and new export orders also weakened further in the month, pointing to persistent global headwinds.


China saw the slowest growth rate for 13 years in 2012, and economic data so far this year came unexpectedly grimmer, prompting concerns that the world's second-largest economy could miss its growth target of 7.5 percent for this year.


China's economic data has been even worse than what the economists who cut their China growth forecasts might expect, notes McDonough, an economist with Bloomberg.


Morgan Stanley cut China's economic growth for 2013 to 7.6 percent from 8.2 percent while UBS and RBS slashed their estimates to 7.5 percent, compared with Barclay's 7.4 percent and ANZ's 7.6 percent (versus pervious 7.8 percent).





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