Data published by Caixin showed that activity in the manufacturing sector increased markedly in June, exceeding economists' forecasts and returning to the territory of expansion.
According to the report, manufacturing PMI rose to 51.7 points in June compared with 48.1 points in May. The last value was the highest since May 2021. Economists had expected the index to rise only to 50.1 points. A value above 50 points indicates an expansion of activity in the sector.
Caixin reported that in June, industrial production showed the first increase since February, while the growth rate was the highest since November 2020. Meanwhile, the number of new orders also increased, recording the fastest growth in 4 months. Delivery times for suppliers stabilized in June amid easing supply chain problems. However, despite the strong recovery, factories remained cautious about hiring more staff, with employment falling for the third month in a row.
Overall, analysts expect further improvement in economic conditions in China in the third quarter, although the official GDP target of about 5.5% this year will be difficult to achieve unless the government abandons the zero-COVID strategy.