Posted on 01 Jul 2022
China's Purchasing Managers' Index (PMI) for the country's manufacturing industry resumed expanding in June, edging up by 0.6 percentage point on month to reach 50.2 after contracting for each of the past three months, according to the latest release by China's National Bureau of Statistics (NBS) on June 30. The result pointed to an accelerated recovery in the national economy, it said.
The implementation of economic stimulus policies and the effective strategy to control the COVID-19 outbreak had speeded up the economy's improvement, Zhao Qinghe, a senior NBS statistician, explained in his analysis of the June performance.
Among the 21 surveyed industrial sectors, 13 were in expansion mode this month or one more than in May, Zhao noted.
In June, supply and demand for the manufacturing industry continued to pick up after being restrained during the COVID outbreak, according to him.
Both the sub-index of production and new orders among Chinese manufacturers returned to expansion territory after a three-month contraction, with the former rising by 3.1 percentage points on month to 52.8, and the latter up by 2.2 percentage points on month to 50.4, the NBS data showed.
Operations and production activity among manufacturing enterprises were also firmly guaranteed by the restoration of logistics services, with the sub-index for delivery times among distributors coming in at 51.3, being 7.2 percentage points higher on month and suggesting the marked acceleration of transport services, Zhao highlighted.
Meanwhile, sub-indices among all enterprises by size showed that large-sized firms remained above the threshold for the second month at 50.2, and medium-sized firms moved up by 1.9 percentage points on month to 51.3. Small-sized firms, however, were mostly still contracting at 48.6 after the on-month gain of 1.9 percentage points.
A strong performance was also seen in high technology and equipment manufacturing sectors, with their PMIs strengthened by 2.3 percentage points on month to 52.8 and 3.3 percentage points on month to 52.2 respectively.
On the contrary, the high energy-consuming sector saw its PMI dip by 1.7 percentage points on month to 48.3, which was also 1.9 percentage points lower than the PMI of the overall manufacturing industry, Zhao elaborated.
Despite the continuing growth in manufacturing activity, some enterprises have been operating under great pressure because their profit margins are being squeezed continuously, he highlighted, pointing out that the finished product ex-works price sub-index had dropped to 46.3 this month and making for the second on-month contraction.
As for the PMI for China's non-manufacturing sector, this jumped by 6.9 percentage points on month to 54.7 in June, according to the NBS statistics. The sub-index of business activities in the service sector increased to 54.3, up from a low base over the prior two months or by 7.2 percentage points on month.
At the same time, the sub-index for business activities in the construction sector climbed too, by 4.4 percentage points on month to 56.6, due to a pickup in construction activities.
Although the June PMI's performance had made progress compared to last month, the country's measures to boost the economy should be further put into effect, in view of the uncertainties which still exist in the domestic and international economic environment, Zhao pointed out.
Source:Mysteel Global
