HONG KONG — A key indicator of China’s manufacturing output rose to a seven-month high in June, pointing to signs of renewed strength in China’s economy and indications that government stimulus measures are helping bolster growth.
The HSBC Flash China Manufacturing Purchasing Managers’ Index rose to 50.8 in June, up from 49.4 in May. This was the highest reading since November 2013 when the PMI index was also at 50.8.
An index reading below 50 indicates factory production is contracting rather than expanding.
HSBC chief economist Hongbin Qu said that the improvement was broad-based with improvements to both domestic orders and external demand.
“This month’s improvement is consistent with data suggesting that the authorities’ mini-stimulus are filtering through to the real economy,” said HSBC chief economist Hongbin Qu. “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.”
The HSBC figure is based on a survey of manufacturers in China and is widely seen as an accurate marker of China’s manufacturing industry health. The final PMI data is released July 1.