Business & Economy

Manufacturing in China expands in June, posts largest growth since March

Beijing, Jun 30 (efe-epa).- China’s Purchasing Managers’ Index (PMI), an indicator of the economic health of the manufacturing sector, stood at 50.9 points in June, the largest increase since March and up from the 50.6 and 50.8 recorded in May and April respectively, according to data published by the National Bureau of Statistics on Tuesday.

The figure exceeds the expectations of analysts, who had predicted 50.4 points for this month.

A figure above 50 points implies growth and below that implies contraction.

The figure, therefore, suggests a recovery since the indicator avoided a contraction for the fourth consecutive month after manufacturing crashed to a record low of 35.7 points in February on account of the halt in activity caused by the coronavirus.

The coronavirus crisis caused a decline in the manufacturing industry in February, far greater than that recorded in its worst reading so far in November 2008 during the global financial crisis (38.8 points).

In the breakdown by company size, large companies grew by 0.5 points to 52.1 while medium companies decreased by 1.4 points to stand at 50.2 and small firms declined by 1.9 points to 48.9.

Three of the five sub-indices that make up the manufacturing PMI were above the 50-point threshold: the sub-index for production at 53.9 points, that of new orders at 51.4 and that of supplier delivery times at 50.5.

However, the sub-index for employment declined by 0.8 points to 49.1 and that of provision of raw materials stood at 47.6.

The PMI for businesses not related to manufacturing was 54.4 points in June. It had stood at 53.6 points in May, 53.2 in April, 52.3 in March and a dismal 29.6 in February.

The services sector, which represents more than half of the country’s gross domestic product, stood at 53.4 points in June following figures of 52.3 and 52.1 in May and April respectively.

The NBS indicated that, in the breakdown of these businesses, only the indices for new orders expanded to 52.7 points, a slight increase of 0.1 points from the previous month.

The index of expected economic activity, which measures the confidence of non-manufacturing companies in future market development, fell 3.6 points to 60.3.

The comprehensive PMI production index, combining manufacturing and non-manufacturing industries, stood at 54.2 points in June as compared to the 53.4 registered in April and May.

NBS statistician Zhao Qinghe said in a statement on Tuesday that the country’s economic recovery continued to gather momentum and highlighted the continued growth of new orders and of demand in the services sector.

However, the expert warned that uncertainties persisted due to the current situation of the epidemic overseas, where it had yet to be effectively controlled, the difficulties faced by small businesses and the fact that China’s powerful textile industry remains below the point of expansion. EFE-EPA

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