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China manufacturing hits nine-month low

31-08-2010
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in 

 

China’s manufacturing activity fell to a nine-month low in August, hit by a drop in new orders and continuing global economic woes.

The HSBC Flash China manufacturing purchasing managers' index (PMI), showed a sharp fall to 47.8 in August, down from July's 49.3.

A PMI reading above 50 indicates expansion, while a reading below 50 points to contraction.

The preliminary result, down from a final reading of 49.3 in July, showed that Chinese manufacturers are still wrestling with declining overseas demand amid the slowing global economy, said Qu Hongbin, a Hong Kong-based economist with HSBC.

“Falling orders dragged down the August flash PMI to a nine-month low, suggesting Chinese producers are still struggling with strong global headwinds,” he said in the statement.

New export business declined at its sharpest rate since March 2009, HSBC said, without giving a figure.

“To achieve the stated policy goal of stabilizing growth and the jobs market, Beijing must step up policy easing to lift infrastructure investment in the coming months,” Qu said.

HSBC is scheduled to release the final PMI for this month on September 3.

China’s economy grew 7.6 percent in the second quarter of this year, its slowest pace in more than three years.

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