China manufacturing shrinks again

China’s manufacturing sector contracted for the fourth consecutive month in June, according to a key index.

AFP reports that the HSBC preliminary Purchasing Managers’ Index (PMI) for June was 49.6, compared to the final May figure of 49.2.

Although June’s preliminary figure was the best result in three months it remained below 50, the point which separates contraction from expansion. It means that the sector has now shrunk for four months in a row.

Commenting on the result, Annabel Fiddes, Economist at Markit said, “The latest Flash China Manufacturing PMI survey provided a mixed bag of data in June. On the one hand, the sector shows signs of improvement as output stabilised amid a slight pick up in total new work, while purchasing activity also rose slightly over the month.

“On the other hand, manufacturers continued to cut their staff numbers, with the latest reduction the sharpest in over six years. This suggests that companies have relatively muted growth expectations as demand conditions both at home and abroad remain relatively subdued.”

“The data add to evidence that the sector has lost growth momentum in Q2 as a whole, and suggests that the authorities may step up their efforts to stimulate growth and job creation in the second half of the year.”

Elsewhere, AFR reports that Markit Economics' preliminary eurozone PMI for June came in at 54.1, an increase from the previous month’s reading of 53.6. The result was the highest in four years for Eurozone.

And as the Economic Times reports, Markit’s preliminary US PMI for June was 53.4, a drop from the May figure of 54 and the lowest for the US since October 2013.