China’s manufacturing industry activity continued in positive territory in June, but the pace of growth slowed for the fourth consecutive month, data published Monday by the private magazine Caixin indicated.
The Purchasing Managers’ Index (PMI), prepared by the British economic information company IHS Markit and distributed by Caixin, fell to 50.5 points in June, after closing in May at 50.5 points.
When it is above 50 points, the PMI suggests an expansion of the sector, while below this barrier it implies a contraction of activity.
The IHS Markit Index, which mainly covers smaller and export-oriented companies, compared to the official PMI, is considered an important indicator of the performance of the world’s second-largest economy.
The index fell for the fourth consecutive month, after reaching 51.6 points in February, the highest rate of expansion in almost a year.
Despite the slowdown, the 50.5 points registered in June exceeded analysts’ expectations who expected the index published by Caixin to be around 50.2 points.
“Growth in manufacturing activity has seen a minimal slowdown,” Wang Zhe, an economist at Caixin Insight Group, said in a statement accompanying the data.
“Both supply and demand increased slightly, the labor market worsened, logistics improved, businesses increased purchases, raw material stocks increased slightly, prices continued to fall, and business optimism faltered,” Wang added.
The specialist pointed out that the increase in demand was mainly due to the domestic market, since that from abroad remained “more or less stable” in the face of the “continuous lethargy” of the world economy.
Wang pointed out that the index that measures the optimism of entrepreneurs in the sector for the next 12 months remained above 50 points, but fell to the lowest level since October, with some of those surveyed worried about a slower economic recovery from expected after. of the end of the ‘zero covid’ policy in China.
“China’s economic recovery has yet to find a stable footing (…). Greater political support will be needed at the macro level, as well as the implementation [de medidas] more effective from a micro perspective, to ensure that policies directly benefit market participants and therefore increase employment and expectations”, recommended the economist.
The numbers published by Caixin contrast with the statistics published on Friday by the Chinese Bureau of Statistics, which put the official PMI at 49 points, marking the third consecutive month of contraction in activity in the sector.
Source: Observadora
