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China says its manufacturing facility exercise expanded in June

A worker welds truck parts in a factory in Weihai, China, on October 18, 2018.

STR | AFP | Getty Images

China announced on Tuesday that manufacturing activity expanded in June and the official purchasing manager index was 50.9.

Economists surveyed by Reuters had expected the official manufacturing PMI to be 50.4. PMI values ​​above 50 indicate expansion, while values ​​below this level indicate a contraction.

In May, the official manufacturing PMI was 50.6, according to the National Bureau of Statistics. PMI measurements are sequential.

The office said in its PMI reading announcement that supply and demand are gradually picking up, with the new job index rising for two consecutive months, according to a CNBC translation. Better values ​​in both the import and export index also help as the major economies reopen.

However, uncertainties remain, the office warned, adding that the overseas pandemic had not been effectively combated.

China's manufacturing activity has been hit on both the supply and demand sides of shocks due to large-scale closures in many parts of the world to contain the coronavirus pandemic. The virus first appeared in the central Chinese city of Wuhan at the end of last year.

While Chinese factories had trouble fulfilling orders at the start of the pandemic, they are now facing a slump in demand worldwide as the number of people infected has passed the 10 million mark, according to Johns Hopkins University.

Another set of factory data will be released on Wednesday by Caixin and IHS Markit. This private survey shows a larger mix of small and medium businesses. In comparison, the official PMI survey typically polls a large portion of large and state-owned companies.

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