Manufacturing index hints at slower economic growth

The preliminary China Manufacturing Purchasing Managers’ Index published by HSBC (HBC.NYSE) hit an 11-month low of 50.1 in June, falling from 51.6 in May and adding to evidence that China’s economic growth is slowing, the Wall Street Journal reported. This month’s reading indicates that nationwide manufacturing barely grew this month; a reading below 50 indicates contraction, while a reading above 50 indicates expansion. A continued slowdown isn’t a surprise, said Citigroup (C.NYSE) economist Ken Peng. “What the market is concerned about is whether the economy will have a hard landing or soft landing.” HSBC Chief Economist for China Hongbin Qu said hard-landing worries are unwarranted, since the current PMI level is consistent with around 13% growth in industrial output. HSBC’s preliminary figure is based on 85-90% of the responses to HSBC’s PMI survey each month. Final June data is scheduled for release on July 1.