Survey shows China manufacturing shrinks in June
HONG KONG (AP) — Manufacturing in China contracted this month at a faster pace as demand weakened, according to a private survey Thursday, adding to fears about a fragile recovery in the world's second-biggest economy.
HSBC said that the preliminary version of its monthly purchasing managers index fell to a nine-month low of 48.3 in June, down from 49.6 in May. Numbers below 50 indicate a contraction.
June factory output decreased, a reversal from gains in the month before, while new export orders and new orders overall decreased at a faster rate.
The index's decline follows "the sequential reduction in both production and demand," HSBC China economist Qu Hongbin said.
"Manufacturing sectors are weighed down by deteriorating external demand, moderating domestic demand and rising destocking pressures," he said, adding he expects "slightly weaker" economic growth for China in the second quarter.
Recent indicators about China's economy have been mixed, raising questions about whether a full-fledged recovery was gaining traction.
Chinese economic growth slowed unexpectedly in the first quarter to 7.7 percent and forecasters have cut their growth outlook for the year.
The preliminary PMI is based on responses from 85 to 90 percent of 420 manufacturing companies polled each month. The full survey is due out on July 1.