China’s official manufacturing PMI records slight improvement in June, showing the economy maintains moderate recovery
Published: Jun 30, 2023 02:08 PM
Photo: CFP

Photo: CFP

China's official manufacturing purchasing managers' index (PMI) reached 49 percent in June, up 0.2 percentage points compared with May, which observers said reflected that the vitality of the manufacturing industry has improved and the economy has maintained a moderate pace of recovery despite multiple pressures at home and abroad.

The index, however, recorded a contraction in June for the third consecutive month. Observers believe China's factory activity will return to positive territory in a few months as the world's second-largest economy further stabilizes and as more effects of supportive policy measures will manifest. 

In terms of industrial scale, the PMI of large-scale and mid-sized enterprises grew 0.3 percentage point and 1.3 percentage points month-on-month to 50.3 percent and 48.9 percent in June, respectively, while that of small-sized enterprises fell 1.5 percentage points to 46.4 percent the same months, according to a statement on the website of the National Bureau of Statistics (NBS) on Friday.

In terms of sub-index, the readings for production and supplier delivery time in June were both above the 50-line that separates expansion with contraction, underscoring an acceleration in manufacturing activity. 

Meanwhile, the indexes measuring new orders, raw material stockpiles and employment landed lower in contraction territory, indicating subdued demand. 

Figures from NBS also showed that the official non-manufacturing PMI reached 53.2 percent in June, slightly down 1.3 percentage points from May. But the reading was still above the 50-seperation-line, continuing its expansion streak from the beginning of the year.

Zhang Liqun, an analyst at China Federation of Logistics&Purchasing, said that the slight rise in manufacturing PMI signaled that the foundation for an economic rebound has been continuously consolidating, and the strength for propelling a full recovery has been gearing up.

Zhang, nevertheless, flagged that pressure in demand shrinking, as 61 percent of the surveyed manufactures expressed concerns over insufficient demand in June, compared with 58 percent in May. 

Now a crucial period for "reversing a demand contraction," Zhang urged relevant authorities should further focus on stimulus measures to shore up domestic demand and ensure government investment plays a role in driving public investment, so as to improve the continuous recovery of the country's manufacturing sector. 

China has been rolling out a range of measures over recent months to shore up the economy. The country has released new policies to boost consumption in new-energy vehicles and household consumption. The central bank in June also cut several key policy rates, the first such move in 10 months, to further provide impetus for economic growth.

China is on course to achieve its 5-percent target for economic growth in 2023, and the second-quarter GDP growth is expected to be faster than the first-quarter of 4.5 percent, Chinese Premier Li Qiang said when addressing the opening of the World Economic Forum's 14th Annual Meeting of the New Champions (AMNC) on Tuesday. 

Global Times