- Annabel Fiddes of the research firm Markit
China's manufacturing sector remained weak in June, a private survey by HSBC showed, which once again contradicted an official report. The HSBC China Manufacturing PMI rose slightly to 49.4 in the reported month, up from 49.2 in May. A figure below the 50-mark threshold signals contraction in the sector. The final reading appeared to be lower than HSBC's flash estimate of 49.6, as the preliminary figure is based on 85% to 90% of responses to the PMI survey. In contrast, China's official PMI reading for June indicated the country's factory activity remained in the expansion territory, coming in at 50.2, unchanged from the preceding month. Yet, both surveys showed manufacturing employment decreased. HSBC said jobs were cut at the fastest rate since February 2009 in the aftermath of the global financial crisis. In the meantime, China's services PMI reading for June climbed to 53.8 from a reading of 53.2 in May, reversing three months of consecutive drops. The June services reading was the highest since February 2015.
Expansion in China's economy, a key engine of global growth, slowed to 7% in the first quarter of 2015 from 7.3% in the final three months of 2014, marking the worst result in six years since the height of the global financial crisis. In order to support the economy, Chinese authorities have embarked on additional stimulus measures this week.
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