China manufacturing slumps to six-year low
2015-08-21 04:41:48.153 GMT
By Angus Grigg and John Kehoe
Aug. 21 (Financial Review) -- China's giant manufacturing
sector has fallen to a 77-month low, a contraction that will
further alarm global markets which are already nervous about
slowing growth in the world's second biggest economy.
The Flash Caixin Purchasing Managers Index for August fell
to 47.1. The result down from July's final reading of 47.8
which was the worst outcome in 44 months.
"The PMI for August has fallen further from July's
two-year low, indicating that the economy is still in the
process of bottoming out," said He Fan, chief economist at
Caixin Insight Group.
The August reading showed a worsening in all the major
indicators including new orders from domestic and foreign
buyers. Analysts had been expecting a pick-up in the PMI from
July's surprising weak reading.
A reading below 50 indicates the sector is operating below
its long run average. The data is compiled by independent
research firm Markit and sponsored by Caixin, a privately owned
Chinese media group.
The PMI data came after markets in the United States on
Thursday tumbled to their worst loss of the year, over fears
the Chinese economy was slowing faster than expected.
"It's all about China. Fears are really starting to
increase almost like a forest fire," said Daniel Ives, a
managing director at FBR Capital Markets in the US.
The Chinese economy is forecast to grow at around 7 per
cent this year, but markets now fear this number is unreachable
without significant government stimulus.
One sign that Beijing is unwilling to let the economy slow
significantly has been a recent pick-up in credit growth, often
regarded as the single most important factor in China's
economic performance.
It hit a 31 month high in July and has increased by 20 per
cent over the last three months, suggesting activity will
rebound later in the year.
Click here to see the story as it appeared on Financial Review
web site.
Financial Review
Copyright © (2015) Fairfax Media Publications Pty Limited.
www.afr.com. Not available for re-distribution.
-0- Aug/21/2015 04:41 GMT
2015-08-21 04:41:48.153 GMT
By Angus Grigg and John Kehoe
Aug. 21 (Financial Review) -- China's giant manufacturing
sector has fallen to a 77-month low, a contraction that will
further alarm global markets which are already nervous about
slowing growth in the world's second biggest economy.
The Flash Caixin Purchasing Managers Index for August fell
to 47.1. The result down from July's final reading of 47.8
which was the worst outcome in 44 months.
"The PMI for August has fallen further from July's
two-year low, indicating that the economy is still in the
process of bottoming out," said He Fan, chief economist at
Caixin Insight Group.
The August reading showed a worsening in all the major
indicators including new orders from domestic and foreign
buyers. Analysts had been expecting a pick-up in the PMI from
July's surprising weak reading.
A reading below 50 indicates the sector is operating below
its long run average. The data is compiled by independent
research firm Markit and sponsored by Caixin, a privately owned
Chinese media group.
The PMI data came after markets in the United States on
Thursday tumbled to their worst loss of the year, over fears
the Chinese economy was slowing faster than expected.
"It's all about China. Fears are really starting to
increase almost like a forest fire," said Daniel Ives, a
managing director at FBR Capital Markets in the US.
The Chinese economy is forecast to grow at around 7 per
cent this year, but markets now fear this number is unreachable
without significant government stimulus.
One sign that Beijing is unwilling to let the economy slow
significantly has been a recent pick-up in credit growth, often
regarded as the single most important factor in China's
economic performance.
It hit a 31 month high in July and has increased by 20 per
cent over the last three months, suggesting activity will
rebound later in the year.
Click here to see the story as it appeared on Financial Review
web site.
Financial Review
Copyright © (2015) Fairfax Media Publications Pty Limited.
www.afr.com. Not available for re-distribution.
-0- Aug/21/2015 04:41 GMT