According to data from the National Bureau of Statistics of the People’s Republic of China on June 30, the Purchasing Managers’ Index (PMI) for the manufacturing sector in China was 49.5 in June, unchanged from the previous month, marking two consecutive months of contraction.
In terms of classification indices, the production index was above the 50 boom-bust line, while the new orders index, raw materials inventory index, employment index, and supplier delivery time index were all below the boom-bust line.
The production index was 50.6, a decrease of 0.2 percentage points from the previous month; the new orders index was 49.5, a decrease of 0.1 percentage points from the previous month, indicating a decline in demand in the manufacturing market. The new export orders index remained unchanged at 48.3, all in the contraction zone, reflecting insufficient effective demand as a major challenge.
Insufficient demand led to further slowdown in the purchasing intentions of enterprises, with the purchasing volume index for June at 48.1, a decrease of 1.2 percentage points, staying below the boom-bust line for two consecutive months. The raw materials inventory index was 47.6, down by 0.2 percentage points. Under insufficient demand, companies tended to use finished goods inventory to fulfill orders, with related indices continuously in the contraction zone.
The employment index for June was 48.1, unchanged from the previous month, a figure that has remained below the critical point since March 2023.
The non-manufacturing business activity index was 50.5%, a decrease of 0.6 percentage points from the previous month, lower than the market expectation of 51. Among them, the business activity index for capital market services, real estate, and other industries fell below the boom-bust line.
However, official Chinese government data often conceals unfavorable situations, and the actual data could be even worse.