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Markit: China’s manufacturing economy accelerating

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Markit:  China’s manufacturing economy accelerating

July PMI hits highest level since January 2013.

Economic data firm Markit reported today that growth in China’s manufacturing economy accelerated to the fastest for a year and a half in July, according to the first PMI-based snapshot of business conditions.

An upturn in export growth signaled by the survey also suggests that global economic growth is reviving as we move into the second half of 2014, providing a welcome accompaniment to signs of an ongoing improvement in domestic demand within China.

The manufacturing PMI rose from 50.7 in June to 52.0 in July, its highest since January 2013, according to the flash reading produced by Markit for HSBC. July was the second successive month in which an improvement in business conditions has been signaled, following five months of decline.

The improvement will fuel hopes that the government is on course to meet its 7.5% growth target for 2014. At 49.4, the average PMI reading for the second quarter was up from 48.7 in the first quarter, an improvement that was later confirmed by official data showing growth of gross domestic product accelerating from an annual rate of 7.4% in the first three months of the year to 7.5% in the second quarter. The latest reading of 52.0 therefore points to a further acceleration of growth at the start of the third quarter. 

The upturn in the headline PMI was driven by faster rates of increase for both output and new orders, as well as a reduction in the rate of job losses compared to prior months.

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