Manufacturing activity in China has contracted for 3 months

Although the Manufacturing Purchasing Managers’ Index (PMI), announced by China’s National Bureau of Statistics (UIB), rose to 49 in June with an increase of 0.2 points from the previous month, it could not break above the contraction threshold.

The manufacturing PMI has again fallen below the growth threshold in the last 3 months after rising in the first three months of 2023, when signs of a post-Covid-19 recovery were observed.

In the manufacturing industry, the new orders subindex increased from 48.3 to 48.6 percent, while the new export orders subindex decreased from 47.2 to 46.4 percent.

The weak momentum in the industry points to the continued vulnerability of China’s recovery after the Covid-19 outbreak, whose economy is largely based on this sector.

NON-MANUFACTURING PMI

The non-manufacturing PMI, for its part, fell 1.3 points to 53.2, although it remained above the growth threshold. The index has been showing a downward trend for the last 3 months.

In the non-manufacturing sectors, the services sub-index fell from 53.8 to 52.8 and the construction sub-index fell from 58.2 to 55.7.

Values ​​above 50 in the PMI indices indicate an increase in economic activities, and values ​​below indicate a decrease.

After the restrictions due to Covid-19, which hindered economic activities in China, were lifted in December 2022, signs of recovery in the economy were seen with the new year.

The PMI manufacturing and non-manufacturing indices have been above the growth threshold since January, and the country’s economy grew 4.5 percent in the first quarter. (AA)