China's Caixin Manufacturing PMI a tad weaker at 51.0 in June, misses estimates
|China's June Caixin manufacturing PMI came in at 51.0 vs. 51.1 expected and 51.0 last, despite the output rising at the quickest rate for four months in June.
On Saturday, the purchasing managers' index (PMI) for China's manufacturing sector arrived at 51.5 in June, down from 51.6 in May, the National Bureau of Statistics (NBS) reported.
Summary
China’s manufacturing sector expanded further in June, with companies registering sustained increases in output and new orders. That said, demand from overseas remained subdued, as new export sales fell for the third month running. At the same time, optimism towards the year ahead fell to a six-month low, while employment declined at the quickest pace since July 2017. Inflationary pressures picked up at the end of the second quarter, with input costs and output charges rising at the fastest rates in five and 11 months respectively.
The headline seasonally adjusted Purchasing Managers’ Index™ (PMI™) – a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy – fell fractionally from 51.1 in May to 51.0 in June, to signal a further marginal improvement in operating conditions. The health of the sector has now strengthened in each of the past 13 months, with the latest improvement broadly in line with the historical trend.
June survey data signaled a further increase in Chinese manufacturing production, with the rate of growth edging up to a four-month high. That said, the pace of expansion remained moderate overall.
Commenting on the China General Manufacturing PMI™ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said: “The Caixin China General Manufacturing PMI stood at 51.0 in June, dropping slightly from a month earlier but remaining in expansion territory. The output index continued to rise, suggesting that manufacturing supply was relatively strong. The new order index dropped marginally, and the employment index dropped for the second consecutive month, indicating worsening layoffs. The index for new export orders fell to a low for the year so far and remained in contraction territory, pointing to a grim export situation amid escalating trade disputes between China and the U.S., which led to weak demand across the manufacturing sector.”
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