Elliot Clarke, Research Analyst at Westpac, notes that China’s official manufacturing PMI remained in robust shape in June 2018, 0.4ppts below the May outcome but still near its long-run average.
Key Quotes
“New orders were similarly positive despite a further deceleration in external demand. Highlighting the discrepancy between domestic and external demand, whereas total new orders were just 0.5ppts below average in June, export orders were 1.4ppts lower. For export orders, similar outcomes were seen in January/ February, but before that not since July 2016.”
“The alternative Caixin measure, which has a greater focus on small and medium-sized manufacturers, has shown a similar deterioration in export orders to be 2.1ppts below average at June.”
“While domestic demand is robust at present, the employment indicators suggest caution is warranted. This is because all have trended lower in 2018 and now sit well below average. Versus their respective averages, services employment is the weakest, 2.3ppts below.”
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