China’s manufacturing activity hit a nine-month low in June as demand fell, according to HSBC’s closely-watched Flash China Manufacturing Purchasing Managers’ Index (PMI).
The British banking giant said its preliminary index came in at 48.3, down from May’s reading of 49.2.
A reading below 50 indicates a contraction.
The weak data comes amid concerns over the health of Chinese economy.
“Manufacturing sectors are weighed down by deteriorating external demand, moderating domestic demand and rising destocking pressures. Beijing prefers to use reforms rather than stimulus to sustain growth. While reforms can boost long-term growth prospects, they will have a limited impact in the short term,” Qu Hongbin, HSBC’s chief economist for China, said in the release.
HSBC said it will release the final reading for the month on July 1.
China’s economy grew 7.8 percent in 2012, its worst performance in 13 years, and the first three months of the year saw expansion of just 7.7 percent.
The government has set a growth target for 2013 of 7.5 percent.
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