Factory Activity in China Slows in June Pushing Further Expectation for Additional Stimulus

Factory Activity in China Slows in June Pushing Further Expectation for Addition

An official survey revealed that growth in the manufacturing sector in China slowed down in June. The report released on Friday adds to the expectations that the Chinese government might have to add further stimulus measures to the economy to boost its strength.

The almost flat activity growth in the second largest economy of the world last month, signals at further weakness to its already long-drawn slowdown.

In June, the official Purchasing Managers' Index was down to 50.0 for June compared to May's 50.1. The 50 midpoint point mark neither shows growth nor contraction on a monthly basis.

Analysts had also predicted the reading to be at 50.0, which is the lowest in four months.

However, the output moved up from 52.3 in May to 52.5 in June but there was contraction in new export orders which was marginal. The figures in total new orders remained just within the expansion zone.

There was also a drop in the employment sub-index which dropped from 48.2 in May to 47.9 in June as the manufacturers continued to trim jobs. In the near future, job losses may grow as the government has undertaken wider capacity cuts in a range of industries.

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