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Manufacturing growth slowdown confirms cooling phase

  • Published 01 Jul 2010

The moderation in Chinese manufacturing, according to figures released Thursday, reaffirms our call (CC April 22 and CC June 17 Editor's View) that the economy is in a cooling phase. Though we expect the slowdown to continue for much of the rest of the year, we do not envisage this turning into a precipitous slump.

Both the official and unofficial purchasing managers' indices (PMI) for June showed a marked slowdown in the pace of expansion. The official Chinese PMI for manufacturing fell from 53.9% in May to 52.1% this month, the lowest reading since February. The unofficial but closely followed HSBC index fell from 52.7% in May to 50.4% in June. Any reading over 50% represents an expansion.

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