China’s manufacturing sector is on the rise and had its best result in 18 months, according to a key private survey.
The Business Spectator reports that the HSBC flash China manufacturing purchasing managers’ index (PMI) for July was 52, a rise from the June figure of 50.7.
Figures above 50 represent expansion in the sector, while figures under 50 indicate contraction.
Commenting on the result, HSBC chief China economist Hongbin Qu said in a statement that the employment and prices sub-indices also improved and stocks of finished goods contracted at a slower pace than previously.
“Economic activity continues to improve in July, suggesting that the cumulative impact of the mini-stimulus measures introduced earlier is still filtering through,” he said.
“We expect policy makers to maintain their accommodative stance over the next few months to consolidate the recovery.”
The China Post reports that Lu Ting, an economist with Bank of America Merrill Lynch in Hong Kong suggested in a report that the PMI raise reflects improved confidence in the sector.
“Due perhaps to the escalation of supportive policies from Beijing, sentiment in the economy and financial markets have been noticeably improved,” he said.
Proactive Investors Australia reports that, following yesterday's result, Australian shares made modest gains. All Ords closed up 9.8 points, (or 0.18%), to 5,576.8.