Corrected: China Caixin June manufacturing PMI rises to 51.8

SINGAPORE (ICIS)–Caixin’s China manufacturing purchasing managers’ index (PMI) rose to 51.8 in June from 51.7 in May as production growth accelerated on the back of rising new orders, the Chinese media firm said on Monday.

Caixin’s headline PMI print was in contrast to China’s June official manufacturing PMI which remained stable from May at 49.5, data from the National Bureau of Statistics (NBS) showed on 30 June.

A PMI reading below 50 indicates contraction in the manufacturing economy, while a higher number denotes expansion.

The June reading marks the Caixin index’s eighth straight month in expansionary territory and its highest level since May 2021, showing ongoing improvement in the sector, said Wang Zhe, a senior economist at Caixin Insight Group.

Manufacturing output growth reached a two-year high, driven by five consecutive months of expansion in both supply and demand, he said.

Demand remained strong, with the total new orders subindex in expansionary territory for 11 months straight, led by consumer and intermediate goods, according to Wang.

While exports continued to grow, the pace slowed for the first time in six months, suggesting a slight weakening of overseas demand, he said.

“Recent macroeconomic data show that the economy continues to recover, with stable production, demand, employment and prices, as well as strong exports,” Wang said.

“Despite this, insufficient market confidence and effective demand remain key challenges. Looking ahead, policy support requires further consolidation.”

The Caixin PMI surveys small and medium-sized enterprises (SMEs) and export-oriented enterprises located in eastern coastal regions while the official PMI is tilted toward larger state-owned enterprises.