According to data released by the China Federation of Logistics and Purchasing, the manufacturing PMI (Purchasing Managers Index) was 53.2% in June, 0.1 percentage points higher than that in May, and was above the critical point of 50% for four consecutive months.
Usually, the PMI is above 50%, reflecting the overall expansion of the economy; below 50%, reflecting the economic recession. "From the current PMI figures, the trend of the manufacturing sector in the expansion period has been established." He Hui, deputy chief economist of the Information Department of the China Federation of Logistics and Purchasing, believes.
“The manufacturing PMI in June is in line with the recent power generation data, which is basically in line with market expectations.†Gao Yi, senior analyst of the macro strategy of the Oriental Securities Research Institute, said in an interview with CBN yesterday, “With the implementation of a series of central government policies and measures, The manufacturing economy has generally shown a steady upward trend."
He Hui told CBN that compared with developed countries, China's manufacturing intensification is not high, and PMI data may need to be higher to reflect economic expansion.
In terms of sub-indicators, the new order index for June was 55.5%, down 0.7 percentage points from May. After the index rebounded to a critical point of 50% in February, it ran smoothly at 55% for four consecutive months. The purchase price index rose more sharply, rising by 4.7 percentage points in June to 57.8%, which has risen for seven consecutive months since December last year.
He Hui believes: "The new orders index fluctuated within a relatively normal range in June, and manufacturing demand is still increasing. The production index in June rose slightly from May to 57.1%; the finished goods inventory index was 45.0%, compared with May. A drop of 1.2 percentage points indicates that production has increased, inventory has fallen, and industry demand has begun to be released."
It is worth noting that the new export orders sub-index rose to 51.4% in May from 50.1% in May, a 13-month high, indicating that exports are improving. Nomura Securities released a report yesterday that this data suggests that the worst period of export may have passed.
In terms of industry, in June, 14 industries including ferrous metal smelting and rolling processing, electrical machinery and equipment manufacturing, communication equipment computers and other electronic equipment manufacturing industries were higher than 50%, general equipment manufacturing and clothing. Six industries, including footwear and hat manufacturing and fur down products, are under 50%.
Gao Yi believes that the current economy is generally in a recovery trend. It is expected that the economic growth rate will reach 8% in the first half of the year. Investment and consumption will continue to grow steadily in June, and the export situation will pick up.
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