Chinese manufacturing and export orders continued to fall in May, and the deceleration is expected to continue for at least the next several months, according to the results of a monthly survey by banking giant HSBC Holdings plc .
Manufacturing conditions have deteriorated in China over the last seven months as demand from Europe withered in the face of continued economic weakness in Europe and fiscal debt-related crisis at several of the region's leading economies. Exports into the United States have also come under pressure in recent months, pushing down the HSBC Flash Manufacturing Purchasing Managers' Index (PMI) to a seven-month low. In June, new export orders decelerated at the fastest pace since March 2009, HSBC said.
"China's manufacturing sector continued to slow in June, though the pace of slowdown seems to be slowing," said Hongbin Qu, chief economist, China, and co-head of Asian Economic Research at HSBC, in a statement.
"With external headwinds remaining strong, exports are likely to decelerate in the coming months. The sharp fall of prices and moderation of new orders suggest weak domestic demand, posing destocking pressures for Chinese manufacturers. All will likely weigh on the jobs market. As such, we expect more decisive policy stimulus to reverse the growth slowdown."
HSBC said new orders, new export orders, and output are contracting at a "faster rate," while other segments of the PMI, including stocks of purchases, quantity of purchases, and employment are contracting at a "slower rate."
The Flash China PMI is based on 85 percent to 90 percent of survey responses from more than 420 manufacturing companies. HSBC conducts the survey in conjunction with Markit, a global financial services company.
China is catching up isnt it. The only difference that the chineese and the others have is that the thinking mentality. Chineese people always think ahead where as most of us who live in other countries do not bother to look beyond what we see. That is where China leads the way.
Do you have any stats on for how long had China been growing? The slow hasn't been catastrophic and at least its a global shrinkage, so when (?) it grows back, they would hope they grow with it.
The Euro zone problems have been bugging the economy for more than 2 yrs now, i wonder when the situation will improve.
@Himanshugupta, I think things have definitely improved after Greece elections. Infact Dow jones is still above 12k levels which is bullish sign. Moreover emerging markets are rallying because oil prices are falling drastically. I believe by 2013 we will see the early signs of recovery.
I don't think counterfeiting is counted in the GDP
@Barbara, you are right. GDP doesnt include gambling, smuggling, and counterfeiting. And that is the reason why GDP is not the most reliable measurement indicator.
Or this can be counterfeiting, which is flooding the market so the original manufacturers are feeling the pain.
But the report only give qualitative picture of the drop in orders and some quantitive report can help in gauging the problem. The Euro zone problems have been bugging the economy for more than 2 yrs now, i wonder when the situation will improve.
Or this can be counterfeiting, which is flooding the market so the original manufacturers are feeling the pain.
But the report only give qualitative picture of the drop in orders and some quantitive report can help in gauging the problem. The Euro zone problems have been bugging the economy for more than 2 yrs now, i wonder when the situation will improve.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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