China’s manufacturing activity faltered last month, official data showed yesterday, with the latest purchasing managers’ index (PMI) hitting 51.4, down from the 51.7 reading in June, the National Bureau of Statistics (NBS) said.
PMI is a gauge of factory conditions, and anything above 50 is considered growth, while a figure below points to contraction. Analysts surveyed by Bloomberg News had expected a reading of 51.5.
Expansion in supply and demand has slowed down due to extreme weather across the nation, where intense heat and flooding in some areas have hindered manufacturing activity, bureau analyst Zhao Qinghe (趙清河) said in a statement.
“July’s PMI signals a slight softening of the manufacturing sector,” Raymond Yeung (楊宇霆) of Australia & New Zealand Banking Group told Bloomberg. “External demand will likely drop in the summer, and third-quarter GDP growth isn’t expected to hit 6.9 percent.”
Capital Economics economist Julian Evans-Pritchard said in a research note that China’s growth momentum may have waned at the start of third quarter.
“We anticipate further weakness ahead as the crackdown on financial risks weighs on credit expansion and economic growth,” he said.
Separately, Japan’s factory output for June ticked up on automakers, chemical companies and others, government data showed yesterday, in the latest sign that the economy is gathering steam.
Industrial production grew 1.6 percent month-on-month, rebounding from a drop of a revised 3.6 percent in May, the Japanese Ministry of Economy, Trade and Industry said.
Production rose at automakers, steelmakers and chemicals companies among others, while output of cellphones, petroleum products and devices to make flat-panel displays and microchips fell.
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