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    China's Caixin PMI for June sinks to four-month low Ivan Delgado

    China 's Caixin Manufacturing PMI for June came below expectations at 48.6 vs 49.2 expected and 49.2 last. Caixin notes June data signals faster contractions of output and new orders, further solid reduction in staff numbers and renewed fall in average input costs.Summary Chinese manufacturers reported the sharpest deterioration in operating conditions for four months in June, with output falling at the quickest rate since February amid a further drop in new work. Consequently, companies continued to pare back their staff numbers at a solid pace, while trimming their inventory holdings of inputs and finished goods further. Prices data indicated a renewed fall in cost burdens faced by Chinese goods producers, while output charges were left broadly unchanged after a three-month sequence of inflation.Commenting on the China General Manufacturing PMI™ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said: “The Caixin China General Manufacturing PMI for June came in at 48.6, down 0.6 points from the May reading. It was the index’s third monthly decline in a row, and marked the steepest deterioration in manufacturing sector conditions since February.""The index’s output category recorded the sharpest decline in four months, with new orders dipping further into contraction. Overall, economic conditions in the second quarter were considerably weaker than in the first quarter, which means there has been no easing of the downward pressure on growth. Against the backdrop of a turbulent external environment, and in order to avert a sharp economic decline, the government must strengthen its proactive fiscal policy while continuing to follow prudent monetary policy" Dr. Zhengsheng Zhong added


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