This is the private survey manufacturing PMI, a different survey to the official PMI we got last week:
- China non-manufacturing PMI for June: 54.9 (prior 54.5)
- China manufacturing PMI for June: 51.7 (expected 51.0)
- China PMIs out today surged ... but there are a few 'buts'
For the China Caixin / Markit Manufacturing PMI (June):
50.4
- expected 49.8
- previous 49.6
This is a 3 month high for the indicator.
Key points:
- Marginal increases in production and new orders
- Backlogs of work continue to rise as staff numbers cut again
- Modest increase in input costs
Commenting, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group:
- "The Caixin China General Manufacturing PMI stood at 50.4 in June, up from 49.6 in the previous month, as manufacturing activity expanded.
- Sub-indices for output and new orders rose marginally from the previous month, while input and output prices showed renewed increases in June, in which input prices rose at a faster pace.
- However, sub-indices for stocks of purchases and stocks of finished goods were both in contraction territory, signaling that businesses are more cautious in restocking.
- The manufacturing sector recovered slightly in June, but based on the inventory trends and confidence around future output, the June reading was more like a temporary rebound, with an economic downtrend likely to be confirmed later."
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A beat on expectations and a beat on the previous, confirming the better showing from the official many PMI that came out on Friday (link above). Of some concern is the comments on confidence:
- businesses are more cautious in restocking
- based on the inventory trends and confidence around future output, the June reading was more like a temporary rebound, with an economic downtrend likely to be confirmed later
