Mainland PMI data adds to weakness fears
Buying gauge hits lowest level since March 2009, fuelling job concerns as producers deal with dwindling orders at home and abroad
The mainland economy is showing further signs of slowing as manufacturers grapple with dwindling overseas and domestic orders, fuelling concerns of lay-offs by employers in the absence of a fresh stimulus package.
The purchasing managers' index released by HSBC and Markit Economics yesterday slumped to 47.6 in August from 49.3 in the previous month as the mainland's manufacturing activity hit the lowest level since March 2009.
The survey by the British banking giant and the specialist research company mirrored the official PMI published by the National Bureau of Statistics over the weekend, which showed the manufacturing activity index falling 0.9 point to 49.2 in August. It was the first time in nine months that the official PMI fell below the 50-point threshold.
A PMI reading above 50 indicates growth in manufacturing while a reading below 50 indicates contraction.
"The economy is sluggish based on the PMI data," said Shenyin Wanguo Securities' chief economist Li Huiyong. "Companies are under increasing pressure to survive the slowdown."
The poor PMI figures triggered mounting worries about lay-offs as mainland employers have struggled to keep their businesses afloat amid the slowdown.