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Explainer | 3 takeaways from China’s manufacturing, services data in June, and what does it say about the economy?
- China’s factory activity extended its decline in June, while the service sector also slowed down last month
- It adds to evidence that the world’s second-largest economy lost momentum in the second quarter ahead of the release of gross domestic product data in mid-July
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1. ‘Slight deterioration’ in China’s factory activity
China’s factory activity extended its decline in June, adding to evidence the world’s second-largest economy lost momentum in the second quarter as demand weakened.
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The official manufacturing purchasing managers’ index (PMI) rose to 49 in June, up from 48.8 in May, but still remained below the 50-mark that separates growth from contraction on a monthly basis.
Nomura analysts said the slight rebound in the official manufacturing PMI was concentrated in production, with the new orders subindex also edging up to 48.6 from 48.3 in May.
But the new export orders subindex slipped to a five-month low of 46.4, with three of the five subindices that directly feed into the headline manufacturing PMI calculation edging down in June.
The Caixin/S&P Global manufacturing PMI, meanwhile, eased to 50.5 in June from 50.9 in May, indicating a marginal expansion in activity.
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