The Purchasing Managers Index (PMI) published by the Chinese Federation of Logistics and Purchasing (CFLP), an organization close to the government, is down again at 50.2 for June, from 50.4 in May and 53.3 in April.
Sunday’s PMI suggested Chinese factories struggled with lackluster foreign and domestic demand in June.
The sub-index for new export orders had its biggest monthly fall since December, shedding 2.9 percentage points to 47.5. New orders, which include domestic orders, slipped 0.6 percentage points to 49.2.
Sunday’s PMI showed the smallest Chinese factories were indeed hardest hit. The PMI for small businesses languished under 50 for the third straight month at 47.2. The PMI for big factories stood at 50.6, and that for mid-sized companies at 50.
But Hua Zhongwei, an economist at Huachuang Securities, was hopeful of an imminent recovery. He expects economic growth to trough at around 7.8 percent in the second quarter, before quickening to 8 percent over the next three months.