Econintersect: It’s only the preliminary reading (final due in a little over a week) but the “flash” HSDC PMI is almost always very close to the final reading. The reading for July is 47.7, down from 48.2 in Hune. Both numbers represent economic contraction for Chinese manufacturing. Readings must be above 50 to indicate expansion. Reuters said that this result was “suggesting the world’s second largest economy is still losing momentum.” Asian stocks weakened on the news and the U.S. dollar strengthened.
The significance of the HSBC PMI reaching this level is seen in the following graph. This is the lowest reading in eleven months and only the third reading near this value since the lower readings during The Great Recession.
Sources:
- China July Flash HSBC PMI falls to 11-month low (Langi Chiang and Jonathan Standing, Reuters, 23 July 2013)
- Asian stocks waver after China PMI disappoints (Lisa Twaronite, Reuters, 24 July 2013)
- China: Manufacturing Slump Continues (GEI News, 01 July 2013)