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Economy

China PMI Drops to 50.1 in June

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By Douglas A. McIntyre Updated Published
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It’s official. The manufacturing sector of China has reached a dead halt. June purchasing managers index (PMI) was 50.1%, just a tad above the point of contraction. The number is inaccurate enough the contraction already may have begun. The 50.1 was from official data issued by the government. Europe-based Markit reported that its figure fell to 48.2 from 49.2 in May. The second number is co-published with HSBC.

It is not entirely clear why the numbers have dropped so far and so fast. It may be that inventories for the manufactured goods China experts overseas are relatively full. It may be that the recession in the European Union and trouble with the U.S. economy are the primary causes. Either way, the manufacturing problem could cause the general gross domestic product (GDP) of the People’s Republic to fall to 6%, a number some economists already have estimated. And a figure that low would be unprecedented in recent years.

According to Reuters:

“The weak PMI reinforces our view that there is 30 percent chance GDP may drop below 7 percent in Q3 or Q4,” said Zhiwei Zhang, chief China economist of Nomura in Hong Kong.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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