China Economy, Construction, Lumber Shipments
The bank’s preliminary Purchasing Managers’ Index (PMI) came in at 49.6 in June, the highest in three months but still below the breakeven point of 50, HSBC said in a statement.The index, which is compiled by information services provider Markit and tracks activity in factories and workshops, is seen as a key barometer of the country’s economic health.
However, while it marked a fourth straight contraction, the figure was an improvement on May’s final reading of 49.2 and also beat a forecast of 49.4 in a survey of economists by Bloomberg News.The figures are the latest to show the economic powerhouse continues to slow despite three interest rate cuts since November as well as other measures to boost bank lending and the housing market.
While total new business and purchasing activity in
creased slightly this month companies continued to slash staff, with the latest reduction the sharpest in more than six years, Annabel Fiddes, an economist at Markit, said in the statement.Zhao Yang, a Hong Kong-based economist with Nomura, also said the overall growth momentum in China was “still weak” despite the improvement in the PMI reading.
“Monetary policy still needs to be further eased to counter the still-strong headwinds in the economy,” Zhao said in a research note.Chinese imports fell for a seventh straight month in May while exports also sank, according to official data, as the world’s second biggest economy shows protracted weakness despite government easing measures.
The disappointing figures, released, also come as leaders try to transform the economy to one where growth is driven by consumer spending rather than by government investment and exports.Imports slumped 17.6 percent year-on-year to $131.26 billion, the General Administration of Customs said in a statement.
The decline was much sharper than the median forecast of a 10 percent fall in a Bloomberg News poll of economists and followed April’s 16.2 percent drop.”The May trade data… suggest both external and domestic demand remain weak,” said Julian Evans-Pritchard, an analyst with research firm Capital Economics, in a note.
Exports dropped for the third consecutive month, falling 2.5 percent to $190.75 billion, Customs said, although that was better than the median estimate of a four percent fall in the Bloomberg survey.”The data add to evidence that the sector has lost growth momentum in Q2 as a whole, and suggests that the authorities may step up their efforts to stimulate growth and job creation in the second half of the year,” she added.
The sharp decrease in imports meant the trade surplus expanded 65.6 percent year-on-year to $59.49 billion.In yuan terms imports fell 18.1 percent, exports decreased 2.8 percent and the trade surplus expanded 65.0 percent.The figures provided further evidence that frailty in the Chinese economy, a key driver of world growth, has extended into the current quarter despite intensified government stimulus measures.
Industrial output, which measures output at factories, workshops and mines, rose 6.1 percent year-on-year in May, the National Bureau of Statistics (NBS) said in a statement.Retail sales, a key indicator of consumer spending, increased 10.1 percent in the same month, the NBS said.The industrial output figure was the highest since a reading of 6.8 percent growth in January-February, when the data were released for two months to iron out distortions related to Chinese New Year.
The May increase was also above the 5.9 percent recorded in April and marginally above the median 6.0 percent rise in a forecast of economists by Bloomberg News.
Source: Markit and others
TB.C. Softwood Lumber Exports to China, as of April’15
BC softwood lumber export volume to China in the first four months of 2015 was 2.263 million cubic meters as compared to 2.091 million cubic meters over the same period in 2014, an increase of 8.2%%. BC softwood lumber export value over this same period was $461.77 million, an increase of 21.3%. These comparisons are skewed as the 2014 numbers where impacted by the April Port of Vancouver strike. We also continue to believe that both volumes and values will decline over the next few months because of large inventory buildups in China.