Industry PMI Photo:VCG

China's manufacturing activities in June continued in the expansion territory, but revealed a weakening trend, affected by repeated outbreaks and supply chain disruption. 

The Caixin Manufacturing Purchasing Managers' Index (PMI) released on Thursday dropped to 51.3 in June, the lowest level since April. The figure was 0.7 percentage points down from May.

A reading above the 50-mark suggests growth, while a reading below 50 indicates contraction on a monthly basis.

The Caixin survey, which concentrates on smaller private firms, tied with the official PMI released by the National Bureau of Statistics (NBS) on the day prior, which registered 50.9 points in June, down 0.1 points from the previous months. 

The expansion rate of manufacturing supply and demand continued to slow down in June, according to the Caixin survey.

The production index though still in the expansion area recorded its lowest level since April. The resurgence of the COVID-19 has dragged down both the production and demand, according to companies participated in the survey.

According to the data, the growth rate of purchasing activity also slowed down in June. The shortage of suppliers' inventory and the slow delivery of logistics lead to problems in the supply chain, said the companies.

Wang Zhe, a senior economist at Caixin Insight Group, said that while the domestic and foreign Pandemic has had some adverse effects on the economy, the economic recovery momentum in the post epidemic era is still in place as the manufacturing industry is still expanding and the employment market continues to improve.

The Caixn employment index in June recorded the highest point in seven months, being in the expansion territory for a third month. Some enterprises surveyed said that they plan to add new capacity due to the business expansion.

While prices still remained at a high level, they slowed down in June compared with that in May as the growth rate of raw materials prices such as metal and fuels has significantly eased back, according to the Caixin data.

The inflation pressure has eased, but the indexes on prices are still on the rise, and the shortage of raw materials still persists, Wang said.

In the second half of the year, as the low base effect continues to weaken, the interweaving of economic downturn and inflation pressure still poses a serious challenge, he said.

Global Times