China’s Twin PMIs Paint Lackluster Picture

China’s vast manufacturing sector remained lackluster in June, twin Purchasing Managers’ Index (PMI) surveys showed on Wednesday, fueling calls for additional stimulus measures to boost the world’s number two economy.

China’s official manufacturing PMI stood at 50.2 in June, unchanged from the previous month and just above the 50-mark that separates growth from contraction, data showed on Wednesday. A Reuters poll had expected a figure of 50.3.
“In general, the softness in the manufacturing sector remains, requiring more policy recalibration,” Liu Li-Gang and Zhou Hao, economists at ANZ, wrote in a note following the data.

The final HSBC PMI, published 45 minutes after the official data, came in at 49.4 in June – below a preliminary reading of 49.6 but a touch above the 49.2 recorded in May.
“The final reading of the HSBC China Manufacturing PMI pointed to a further decline in the health of the manufacturing sector in June. This was predominantly driven by the sharpest rate of job shedding across the sector since early-2009, while output also fell slightly on the month,” said Annabel Fiddes, economist at Markit.

“On the upside, there were some signs of improvement in the shape of renewed increases in total new orders and new export business, suggesting that client demand both at home and abroad is reviving. However, it is likely that more stimulus measures will be required to ensure that the sector can regain growth momentum and to encourage job creation,” she added.


Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.