China's June Caixin PMI recovers 50 mark, stronger increases in production and orders
|China Caixin Manufacturing PMI for June came at 50.4 vs 49.5 exp and 49.6 last, with Caixin's summary noting that firms saw slightly stronger increases in production and new orders, which prompted companies to increase their purchasing activity.
Summary
The PMI climbed back into positive territory in June, with firms noting slightly stronger increases in production and new orders. This prompted companies to increase their purchasing activity, albeit only slightly. However, relatively muted client demand overall led manufacturers to reduce their inventory holdings and trim their workforce numbers again. At the same time, optimism towards the business outlook edged down to its lowest level in 2017 to date.
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 50.4 in June, up from 49.6 in the previous month, as manufacturing activity expanded. Sub-indices for output and new orders rose marginally from the previous month, while input and output prices showed renewed increases in June, in which input prices rose at a faster pace."
"However, sub-indices for stocks of purchases and stocks of finished goods were both in contraction territory, signaling that businesses are more cautious in restocking. The manufacturing sector recovered slightly in June, but based on the inventory trends and confidence around future output, the June reading was more like a temporary rebound, with an economic downtrend likely to be confirmed later" Dr. Zhong added.
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