01 August 2013 05:05 [Source: ICIS news]
(adds details from HSBC PMI report)
SINGAPORE (ICIS)--China’s official purchasing managers’ index (PMI) rose to 50.3% in July from 50.1% in the previous month, signalling that the country’s key manufacturing sector picked up amid stronger demand for its goods, official data showed on Thursday.
A PMI reading above 50% indicates expansion, while a reading below 50 denotes contraction in manufacturing activities.
A sub-index measuring new orders rose to 50.6% in July from 50.4% in June, according to the China Federation of Logistics & Purchasing (CFLP).
In contrast, HSBC’s Purchasing Managers' Index (PMI) for China fell to an 11-month low of 47.7 in July, down from 48.2 in June, signalling a deterioration of business conditions for the third straight month, the investment bank said on Thursday.
The HSBC PMI matched a preliminary figure published last week.
“July signalled a marked deterioration of business conditions faced by Chinese manufacturers,” HSBC said in its latest statement.
“Output across the sector contracted for the second month in a row, as total new orders declined at a faster rate,” it added.
Production levels fell for the second month in a row in July, driven by a further decline in new business, in both domestic and international markets, according to HSBC.
New export orders fell at a reduced pace in July, marking the fourth straight month of decline.
“Anecdotal evidence indicated deteriorating market conditions, both domestically and internationally, had led to reduced client demand,” it said.
“Exporters reported that new sales to Europe, South East Asia and the United States were all lower compared to June levels,” HSBC added.
China’s government has introduced fine-tuning measures to boost spending, from tax breaks for small companies to increased spending on public housing, railway, energy saving and IT infrastructure, said Hongbin Qu, China chief economist at HSBC.
"These targeted measures should boost confidence and reduce downside risks to growth," Qu added.
China’s economy, which relies heavily on its manufacturing and export sectors, decelerated further in the second quarter, logging in an annual growth of 7.5%
The country’s economy grew at an annualised rate of 7.7% in the first quarter of this year.
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