A purchasing managers’ index dropped to 57 from 61.9 in May, the China Federation of Logistics and Purchasing said on its website today. A reading above 50 indicates an expansion. A manufacturing index fell in June to the lowest level in 28 months as export orders and output grew at a slower pace, according to a July 1 report also released by the federation.
“Although from April it has kept dropping, the index level still shows China’s non-manufacturing industries are maintaining quite quick growth,” Cai Jin, the organization’s vice president, said in today’s statement. “Affordable housing construction has accelerated.”
The non-manufacturing PMI is based on data from industries including transport, real estate, retailing, catering and software.
Pressure for additional monetary tightening may be easing, after manufacturers’ input prices rose in June at the slowest pace since July 2010, according to logistics federation data. Morgan Stanley says inflation may have peaked last month at an estimated 6.2 percent, the highest rate since July 2008.
“The risk of a hard landing for China’s economy is small,” Peng Wensheng, an economist with China International Capital Corp., said in Beijing on July 1. Peng sees one or two more interest-rate increases this year.
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