China official PMI turns zombie

China’s official PMI for June is out and is clearly struggling to gain momentum at 50.2 versus 50.3 expected and unchanged from May. Output was also steady at 52.9 but new orders were virtually flat falling to 50.1 versus 50.6 last month. New export orders fell away as well to 48.2 from 48.9:

For years it’s been sag and rebound but, as you can see, this is an unprecedented period of going nowhere. China is clearly struggling to get traction with stimulus against heavy asset price headwinds and a high real exchange rate. There is no rebound of any substance coming here.

There was some better news in the non-manufacturing PMI which is just as important to Australia, given it includes construction, firming from 53.2 to 53.8.

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:

$24.99 / month

$249 / year

Cancel at any time through our billing provider, Stripe

Share

About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.