Jul. 24, 2012 (China Knowledge) - The preliminary HSBC China manufacturing purchasing managers' index (PMI), a preliminary gauge of China's manufacturing sector, dropped to 49.5 in July this year, 1.3 points higher than the final reading of 48.2 in June and reflecting the highest level in five months, according to data released by HSBC Holdings PLC<0005
The rebound in the HSBC PMI eased concerns over a significant slowdown in the Chinese economy. However, the reading stayed below 50 for the ninth consecutive month. A reading below 50 indicates contraction from the previous month, while a reading above 50 suggests expansion.
Qu Hongbin, chief economist for HSBC China, said that the July figure indicated that loose macroeconomic policies earlier adopted by the government are starting to work but implied still weak demand and greater employment pressure.
In June, the output index rose to nine-month high of 51.2, and the new order index rebounded to 48.9. The new export order index rose to 48.2 last month from 45.7 in June.
The product inventory index fell to 49.5 last month, and employment index further dropped to 47.4, the lowest level since March 2009.