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China factory activity contracted in June as US trade war tariff increase in May starts to bite
- Caixin/Markit Manufacturing Purchasing Managers’ Index fell to 49.4 in June from 50.2 in May, its lowest reading since January
- Like official PMI released on Sunday by the National Bureau of Statistics, private survey data show manufacturing sector contracted in June
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Chinese factory activity fell to its weakest level in five months in June, a private survey released on Monday showed, pointing to continued downward pressure on the economy due to the trade war with the United States.
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The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI), a gauge of sentiment among the country’s factory operators which tends to include more small, private sector firms, fell to 49.4, down from 50.2 in May and below economists expectations of a smaller drop to 50.1 in a Bloomberg survey.
The June reading was the lowest since January, with a number below 50 meaning the manufacturing sector contracted after having expanded in the three previous months.
The weaker-than-expected PMI private survey data followed Sunday’s official manufacturing PMI, which covers more larger and state-owned firms, and it also indicated a contraction in the sector after remaining unchanged at 49.4 in June, also below economists’ forecast, according to the National Bureau of Statistics. The official non-manufacturing PMI edged down to a six-month low of 54.2 driven by a decline in the services component.
The decline in the new orders component of both the private and official indices points toward cooling demand in China, analysts said. A renewed decline in export orders reflected the challenging external environment, analysts added.
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