The HSBC’s report for China Manufacturing PMI for June is out, here the highlights:
• Output contracts at slower pace as new orders show signs of revival
• Staff numbers are cut at sharpest rate since February 2009
• Average input costs decline at slowest rate in eight months
Latest survey data indicated that operating conditions faced by Chinese manufacturers continued to deteriorate in June, albeit at a weaker rate. Total new orders rose for the first time in four months, though only slightly, while output contracted at a weaker pace than in May.
However, manufacturers continued to cut their workforce numbers in June, with the latest reduction the strongest seen since February 2009. On the costs front, average input prices fell at a modest rate that was the slowest since last August, while companies discounted their selling prices for the eleventh successive month. The HSBC Purchasing Managers’ Index™ posted at 49.4 in June. This was the fourth successive month that the PMI has registered a level in contractionary territory. However, the latest reading was up from 49.2 in May, and signalled a marginal rate of deterioration that was the slowest since March.
Manufacturers in China signalled a tentative improvement in overall demand conditions at the end of the second quarter. This was highlighted by a renewed expansion in total new business placed at goods producers in June, with new work from abroad also rising on the month.
Chinese manufacturing employment declined for the twentieth consecutive month in June. Furthermore, the pace of job shedding accelerated to the fastest seen since February 2009. Reduced payroll numbers and a slight upturn in new work contributed to a second monthly accumulation in the level of work-in-hand. Higher new business meanwhile led to increased purchasing activity in June. Although the rate of expansion was marginal, it was the first time that input buying has risen since March. The latest survey pointed to a further easing in the rate of input price deflation during June, with average input costs declining at the slowest pace since last August.