China News recently reported that, on July 1, HSBC released the June PMI (Purchasing Managers Index) number for the Chinese manufacturing industry. The June number was 48.2, which is lower than the previous month’s 49.2. This latest PMI number marked a nine month low and indicates that the Chinese manufacturing sector is still on a decline. The new low is directly related to the widespread decrease in customer demand. Both new orders and new exports are shrinking in volume, representing the largest slide since last September. The level of the labor workload in manufacturing companies is declining as well. This is the heaviest decrease since last August. The manufacturing sector inventory level has also dropped for the fifth month. Meanwhile investments and prices are all falling. Qu Hongbin, HSBC Chief Economist for the China Region, commented that the HSBC PMI number demonstrated that the Chinese manufacturing sector is showing signs of shouldering heavy pressure on the demand side while small and medium sized companies are seeing a deterioration of financing conditions. PMI is an indicator of financial activity reflecting purchasing managers’ acquisition of goods and services. A PMI number below 50 typically reflects a decline.
Source: China News, July 2, 2013