China Manufacturing Sector Continues To Expand
June 30 2024 - 9:34PM
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China's manufacturing sector continued to expand in June as
production growth accelerated the most in two years underpinned by
rising new orders, survey data from S&P Global showed on
Monday.
The Caixin manufacturing Purchasing Managers' Index rose to 51.8
in June from 51.7 in the previous month. A score above 50.0
indicates expansion.
This was the eighth consecutive monthly improvement and also
marked the fastest since May 2021.
However, the official survey showed that China's manufacturing
sector contracted for the second straight time in June. The factory
PMI held steady at 49.5.
Manufacturing output grew at the fastest rate in two years,
S&P Global said. Firms in the consumer segment again registered
sharp output expansion in June. New product launches and market
development efforts helped to lift new work inflows. Export orders
also continued to increase in June.
The increase in new work intakes led to a fourth consecutive
month of backlog accumulation. Employment in the manufacturing
sector was close to stabilization in June.
Manufacturers raised purchasing levels at one of the highest
rates in more than three years in order to meet the rise in
production. Stocks of finished goods increased slightly.
Suppliers' delivery times lengthened for the first time since
February. Shortages of input materials and delivery constraints
were cited as reasons for the delays.
Input costs increased at the fastest pace in two years in June.
This has spurred firms to lift selling prices for the first time in
six months. Average selling prices increased at the fastest pace in
eight months.
Sentiment among manufacturers also remained positive midway into
2024. Confidence weakened to the lowest in over four-and-a-half
years, dampened by concerns over rising competition and uncertain
market conditions.
"Recent macroeconomic data show that the economy continues to
recover, with stable production, demand, employment and prices, as
well as strong exports," Caixin Insight Group senior economist Wang
Zhe said.
The economist noted that the improvement in the manufacturing
sector, insufficient market confidence and effective demand remain
key challenges.
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