Accounting

China's PMI Was 50.9 Percent in June And The Growing Speed of Economy Slowed Down

According towards the report of China Federation of Logistics, the manufacturing PMI of China was 50.9 percent in June 2011 and also the period-on-period growth fell down 1.one percent. The manufacturing PMI remains above 50 percent reflecting the current economy of China is growing, however the growing speed keeps falling down. After checking out all of the indexes, we are able to see just the stock index of semi-finished products increased 1 %, other indexes dropped to various degrees.

The production index, new order index, backlog index, purchasing volume index, purchasing price index, raw materials inventory index all dropped a lot more than one percent. The purchasing price index decreased the most, reached 3.6 percent. In the passed month, the PMIs of electrical machinery, equipment manufacturing, agro-food processing, food manufacturing industries all reached 50 % or more. The PMIs of chemical product and chemical raw material manufacturing, textiles, transportation equipment industries were below 50 percent.

The regional PMI in average: the East and West of China was above 1 / 2 in average, anchortext (samaracamps.com) the middle region was below 50 %. To the product types, consumer goods companies was more than 50 %, however the garbage and energy, intermediate goods and handle goods companies was less than 1 / 2. According to the manufacturing PMI data in June, we can easily determine that this economic growth may continue to decrease in the near future due towards the durative lowering of PMI index.

The decrease in PMI index was on account of adjustments of inventory, the purchasing price index and garbage inventory index decreased significantly which indicated the inventory adjustment determined by inflation expectation was at action, it is going to get a new economic growth. But the inventory adjustment is short-term, so it will not modify the economy deeply and last for number of years. We should note that the affection of investment, consumption and exports requirement could be bigger to the increase of economy.

The demand growth is steady for the time being and the economic growth will not correct deeper. The import index and new export orders index also fell down in June. The import index was 48.7 percent, 1.8 percent lower than May. The import indexes of beverage, paper printing, sports products and communication equipments were higher than fifty percent. The import indexes of ferrous metal smelting, general equipment, chemical unprocessed trash and chemical products industries were below 50 %.

The employing index fell to 50.2 percent in June, 0.7 percent below that in May. The employing indexes of beverage, special equipment, ferrous metal smelting and processing industries were higher than 1 / 2. The employing indexes of chemical garbage and chemical products, non-ferrous metal smelting and processing industries were below fifty percent. PMI (Purchasing Managers Index) is an indicator in the economic health in the manufacturing industries.

It is determined by five major indicators: new orders, inventory levels, production, suppliers deliveries and also the employment environment.