China’s manufacturing sector is clawing its way back towards growth in July, according to a survey that suggests government policies to support the economy are starting to work.
HSBC said its purchasing managers’ index for July was on track to rise from 48.2 last month to 49.5, which would mark a five-month high. But, in remaining below the 50 threshold, the flash PMI figure – the earliest piece of monthly economic data for China – indicates that factory activity is still contracting at a mild pace.
“Earlier easing measures are starting to work,” said Qu Hongbin, head of Asian research at HSBC. “That said, the below-50 July reading implied demand still remaining weak and employment under increasing pressure. This calls for more easing efforts to support growth and jobs.”