Growth in production underpinned China’s factory activity in June after the government lifted coronavirus-related lockdowns and boosted support for investment, the official manufacturing Purchasing Managers’ Index (PMI) survey showed. However, persistent weakness in export orders is expected to continue weighing on the economy for some time.
According to the survey by the National Bureau of Statistics (NBS), PMI came in at 50.9 in June, beating May’s 50.6 and Reuters poll’s forecast of 50.4. A reading higher than the 50-point mark indicates growth in activity.
Production sub-index increased to 51.4 from 50.9 in May, implying a strengthening in domestic demand. However, export orders continued to shrink, albeit at a slower rate. The sub-index for export orders stood at 42.6 in June, improving from May’s 35.3, but staying below the 50-point mark. Employment sub-index also remained below the benchmark, falling from 49.4 in May to 49.1 this month.
A separate survey on the service industry also signalled steadily stabilising business confidence. China’s official PMI for the non-manufacturing sector stood at 54.4, increasing from 53.6 in May. However, construction activity, a key driver of growth, slowed from the prior month.
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Published on June 30, 2020 5:16 PM (GMT+8)Last Updated on June 30, 2020 5:16 PM (GMT+8)
