Financial News: China Manufacturing Activity Returns To Growth

China Manufacturing Activity Returns To Growth

07/01/2025 - 05:15:00 (RTTNews)

(RTTNews) - China's manufacturing sector returned to growth in June on higher new orders and a renewed rise in production, survey data from S&P Global showed on Tuesday.

The Caixin manufacturing Purchasing Managers' Index rose to 50.4 in June from 48.3 in May. A reading above 50.0 indicates expansion.

The survey showed that the growth was driven by a renewed expansion in manufacturing output following a brief decline in May. The rate of growth was fastest since last November.

Better trade conditions and promotional activities underpinned a fresh rise in new orders. Nonetheless, new export orders declined for the third month in a row, albeit noticeably weaker pace than in May.

There was a slight accumulation of backlogged orders in June, which was attributed to both higher new work inflows and a reduction in workforce capacity. Employment decreased amid resignations and redundancies. Although the future output index moved above the neutral mark, the level of confidence eased since May and remained below the long-run trend.

The level of pre-production inventory across the sector was unchanged, while stocks of finished goods were depleted slightly.

"With earlier policy measures aiming to stabilize the economy continuing to take effect, the overall operation of the economy remains stable, alongside a gradual recovery of market conditions," Caixin Insight Group Senior Economist Wang Zhe said.

"While some of the existing stimulus policies may have front-loaded short-term consumption, unleashing consumption potential in the long term still relies on aspects including stabilizing employment, reinforcing confidence, and increasing incomes," Zhe added.

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