Caixin
Aug 02, 2013 06:18 PM

PMI Figures from Gov't, Bank at Odds with Each Other

(Beijing) – Discrepancies have emerged between the official Purchasing Managers' Index for July and HSBC's version.

The latest figures from the National Bureau of Statistics released on August 1 show that PMI increased to 50.3 in July from 50.1 in June. The NBS says the increase was largely due to rising demand for domestically made goods.

A PMI above 50 indicates growth of manufacturing, while below 50 signifies contraction.

Zhao Qinghe, an NBS statistician, said that the slight growth in PMI was due in part to increased business confidence and a moderate rise in small business PMI.

However, figures from HSBC released the same day were more pessimistic. The bank said that according to its math July's PMI fell to 47.7 from 48.2 a month earlier. The July figure was an 11-month low, the bank said.

Dong Tao, chief economist of Credit Suisse Asia, said the discrepancy arises from differences in methodology. HSBC's PMI calculations gave more weight to the performance of small and medium-sized enterprises (SMEs) than the NBS' did.

Goldman Sachs Gao Hua Securities, a joint venture, says large enterprises face different challenges than SMEs did. The recent liquidity crunch, high amounts of pollution and overcapacity created different circumstances for bigger manufacturers.

Analysts at ANZ Bank also noted that the government's PMI figures skipped mention of certain itemized data sets, including information about the steel industry's losses.

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