China's June official PMI
seen at a six-month high
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[June 30, 2014]
BEIJING (Reuters) - China's
vast factory sector probably registered its best
performance this year in June as growth quickened to a
six-month high, further signaling that its economy is
regaining strength after an unsteady start to 2014.
A Reuters poll of 19 economists showed the official Purchasing
Managers' Index (PMI) is forecast to rise to 51 in June, edging
further from the 50-point level that denotes growth from contraction
in activity on a monthly basis.
The PMI stood at 50.8 in May.
"The effect of stabilizing economic growth will be more obvious in
June," economists at Industrial Bank said in a note. "It will lessen
the market's pessimistic expectations."
A PMI reading of 51 would be the best since December and the latest
sign that growth in the world's second-biggest economy is
stabilizing, after hitting an 18-month low of 7.4 percent in the
Still, some investors are likely to worry that the economy is not
out of the woods due to risks from the cooling housing market.
Accounting for about 15 percent of China's economy, the real estate
sector is the country's biggest wild card this year in terms of
growth, some economists say.
Home prices retreated in May for the first in two years, while sales
of new homes and new construction have fallen sharply.
Pessimistic analysts fear that a sharper-than-expected downturn in
the real estate market could strain the banking system and hobble
the economy, and are therefore urging authorities to relax
investment rules in the sector to bolster growth.
But the property market aside, China's economy has recently shown
encouraging signs of stabilization. Growth in factory output, retail
sales and fixed asset investment all either met or beat market
expectations last month, with retail sales notching its best showing
in five months.
The first piece of economic data to be released by the government
each month, the official PMI is closely watched by the market and is
one of five similar surveys of the manufacturing and services
Analysts say the official PMI poll is biased towards bigger,
state-owned factories while a separate PMI published by HSBC/Markit
favors smaller, private manufacturers. But the two PMIs tend to move
in the same direction.
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The official PMI will be released on Monday at 9 a.m. Beijing time.
Below is a table of the PMI forecasts.
Bank of China 51.0
BNP Paribas 51.0
China Minzu Securities 51.0
Credit Suisse 51.0
Galaxy Securities 51.0
Guangdong Development Bank 51.0
Haitong Securities 51.0
Hwabao Trust 51.0
Industrial Bank 50.9
ING Financial Markets 51.2
Shanghai Securities 51.0
Shenyin & Wanguo 51.1
Standard Chartered 50.9
(Reporting by Shao Xiaoyi and Koh Gui Qing; Editing by Kim Coghill)
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