Overview of the Caixin Private Sector Manufacturing PMI
China’s factory activity expanded again in June, backed by an increase in new orders that boosted production, according to a private sector survey.
Global Manufacturing PMI by Caixin/S&P
The Caixin/S&P Global Manufacturing PMI rose to 50.4 points in June from 48.3 points in May, surpassing analyst expectations in a Reuters survey.
A score of 50 points separates growth from contraction, indicating a positive trend for China’s manufacturing sector.
Economist’s Perspective
Wang Zhe, an economist at Caixin Insight Group, stated, “Overall, supply and demand in the manufacturing sector recovered in June.”
However, he acknowledged that the external environment remains challenging and complex, with growing uncertainties. The issue of insufficient domestic demand has yet to be resolved.
Key Developments in June
- New Orders: New orders increased in June after declining in May, driven by improved trade conditions and promotional activities that spurred sales.
- Production: Factory production reached its highest level since November 2024 due to the rise in new orders and reduced workforce capacity.
- Backlogs: For the first time in three months, backlogs of orders accumulated due to increased new orders and reduced workforce capacity.
- Employment: Manufacturing employment in China contracted in June due to resignations and layoffs, with some small exporters selling at a loss or cutting salaries and jobs to stay afloat.
- Prices: Average production prices fell at the most significant rate since January, driven by lower input costs. However, export prices continued to rise due to increased shipping and logistics costs.
- Business Confidence: Business confidence declined from May and remained below the long-term trend.
Expert Opinion on Upcoming Politburo Meeting
Economists at Goldman Sachs believe it is unlikely that the upcoming July Politburo meeting will result in substantial stimulus measures.
