A Chinese manufacturing indicator rose to a seven-month high in June, supporting the government's claim that the economy will avoid a hard landing as it puts stimulus measures in place to boost growth.
The HSBC preliminary - - or flash - - manufacturing purchasing managers index (PMI) rose to a seven-month high of 50.8, up from 49.4 in June, according to data released Monday - - it was also the first time in 2014 that the PMI moved above the 50 mark, which separates expansion from contraction compared with the previous month.
The estimate is typically based on approximately 85%–90% of total PMI survey responses each month and is designed to provide an accurate indication of the final PMI data. June final PMI data will be released on 1 July 2014.
Flash China Manufacturing PMI was at 50.8 in June (49.4 in May); the Flash China Manufacturing Output Index was at 51.8 in June (49.8 in May) - - both at seven-month highs.
Hongbin Qu, chief economist, China & co-head of Asian Economic Research at HSBC said: "The HSBC Flash China Manufacturing PMI reading rebounded to a year to date high of 50.8 in June. The improvement was broad-based with both domestic orders and external demand sub-indices in expansionary territory. Inventory reduction quickened, and the employment sub-index also showed signs of stabilization. This month's improvement is consistent with data suggesting that the authorities' mini-stimulus are filtering through to the real economy. Over the next few months, infrastructure investments and related sectors will continue to support the recovery. We expect policy makers to continue their current path of accommodative policy stance until the recovery is sustained."
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