China's June factory activity rises to six-month high: Caixin PMI

China's June factory activity rises to six-month high: Caixin PMI

China's factory activity grew at a faster clip in June after the government lifted coronavirus lockdown measures, but the health crisis continues to weigh on exports and jobs, a private business survey showed on Wednesday.
Source: www.reuters.com

BEIJING (Reuters) - China’s factory activity grew at a faster clip in June after the government lifted coronavirus lockdown measures, but the health crisis continues to weigh on exports and jobs, a private business survey showed on Wednesday.

The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) rose to 51.2 last month, from May’s 50.7. The 50-mark separates growth from contraction on a monthly basis. Analysts polled by Reuters had expected a reading of 50.5.

China’s economy is gradually emerging from a sharp 6.8% contraction in the first quarter, with much of the country reopened after weeks of disruptions early in the year due to strict lockdown measures.

But demand remained subdued, as many manufacturers are still struggling with reduced or cancelled overseas orders amid faltering global demand. While some of China’s trading partners are easing curbs and re-booting their economies, many are still grappling with the pandemic.

Consumers have also remained cautious amid job losses and fears of a fresh wave of infections in China as a cluster emerged in Beijing last month.

An official survey on Tuesday also showed China’s factory activity grew at a quicker pace in June but smaller firms were still suffering and exporters struggled with shrinking orders, pointing to an uneven recovery.

The People’s Bank of China has already rolled out a raft of easing steps since early February, including reserve requirement cuts and targeted lending support for virus-hit firms. It will cut the re-discount and re-lending rates by 25 basis points as of July 1, two sources with direct knowledge told Reuters on Tuesday.

 

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