The results of a private survey released on Wednesday showed that China's manufacturing activity expanded and exceeded expectations in June, reaching its highest level since December 2019.
Caixin / Markit Manufacturing's purchasing manager index was 51.2. Economists surveyed by Reuters expected 50.5 versus 50.7 in May.
PMI values above 50 indicate expansion, while values below this level indicate a contraction. The monthly PMI values are sequential.
"Manufacturing continued to expand as most of the country had the epidemic under control and the economy continued to recover," said Wang Zhe, senior economist at Caixin Insight Group, in a press release.
While general production demand recovered quickly, overseas demand remained an obstacle, Wang wrote.
"New export orders continued to decline due to weak foreign demand as the overseas epidemic situation remained uncertain in many places and the number of new infections every day remained high," he said.
However, overall demand has "remarkably improved". The sub-index for the total order intake was expanded for the first time since January, since the gradual abolition of measures to combat epidemics allowed production to be resumed.
Although supply and demand improved in June, the employment sub-index remained negative for the sixth consecutive month and was even weaker than in May.
"Manufacturers remained cautious about increasing settings," said Wang.
China said on Tuesday that manufacturing activity increased with an official PMI of 50.9 in June, but the country's statistics bureau said there is still headwind caused by the economic consequences of the coronavirus pandemic.
The private survey shows a larger mix of small and medium-sized companies. In comparison, the official PMI survey typically polls a large portion of large and state-owned companies.
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