BEIJING — After months in a what has appeared to be a steady slump, China’s manufacturing industry could be showing signs of a resurgence, according to a preliminary purchasing manager’s index released on Tuesday.
The HSBC China Flash purchasing managers index (PMI), which estimates manufacturing output, is set to rise to 49.5 in July from 48.2 in June, marking the first increase in five months. The initial data puts the index close to 50, an important watermark for this particular economic data. A PMI showing of 50 or more indicates growth in manufacturing output, while sub-50 readings point to a contraction. The index has sat below 50 for the past nine months.
If the PMI is indeed is back on the rise as believed, it’s an indication that China’s production sector might be picking up after many slugging months that have led to factory closures and job losses across the country’s manufacturing zones.
China’s economy has grown at a significantly slowed pace since the global financial crisis, though it was buoyed by massive government infrastructure investment projects. Banks and analysts expect the growth rate to pick up in the second half of this year, with the World Bank now projecting an overall 8.2 percent growth rate in 2012. That’s still faster than the government’s own projections of 7.5 percent and a higher rate than the 7.6 percent growth in the first half of this year.
With its power transition at the top slated to begin this fall, China is trying to maintain a steady hand on the economy. Earlier this month, Premier Wen Jiabao warned that recovery is still shaky and unemployment remains a key priority.