Date
24 May 2017
Healthy construction activity helped raise the official nonmanufacturing PMI. Photo: Reuters
Healthy construction activity helped raise the official nonmanufacturing PMI. Photo: Reuters

More signs of weakness in Chinese economy

Factory activity in China fell short of market expectations last month, suggesting weakening momentum in the world’s second-largest economy, The Wall Street Journal reported.

The official manufacturing purchasing managers index (PMI) remained at 50.2 in June, unchanged from May, the National Bureau of Statistics said Wednesday.

While the reading was above 50, the level that separates expansion from contraction, it missed the median 50.4 forecast from a Wall Street Journal poll of 11 economists.

New orders and export orders fell in June from the previous month, suggesting further headwinds for growth, said Zhang Liqun, an analyst at the China Federation of Logistics and Purchasing, which issues the official PMI data with the statistics bureau.

A competing PMI from HSBC and research firm Markit, also released Wednesday, rose to 49.4 in June from 49.2 the previous month but came in lower than a preliminary reading of 49.6 reported a week ago.

The HSBC PMI pointed to problems in manufacturing employment, with “the sharpest rate of job shedding across the sector since early 2009”, Annabel Fiddes, an economist at Markit, was quoted as saying.

However, the official nonmanufacturing PMI, also released Wednesday, rose to 53.8 in June from 53.2 in May, lifted by healthy construction activity, the statistics bureau said.

Economists said more stimulus policies, especially fiscal measures such as more tax breaks and infrastructure spending, are needed to prop up growth, which they said likely continued to slow during the second quarter of the year, the newspaper said.

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