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China manufacturing weakens, services show improvement

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Staff writer |
China manufacturing
Asian economy   Caixin index dropped for the third month in a row

Data out of China showed the manufacturing sector weakened in June, but the services sector improved.

The Caixin manufacturing purchasing managers' index, a private gauge of factory activity, dropped for the third month in a row to 48.6 in June from 49.2 in May, missing expectations for it to remain unchanged. A reading below 50 indicates contraction.

China's official manufacturing PMI fell to 50.0 in June from 50.1 the previous month, in line with consensus expectations.

Nomura, which had been expecting a reading of 49.9, said the modest fall in the headline masked significant divergences among enterprises.

"The PMI for large-sized enterprises rose by 0.7 percentage points (pp) to 51.0 in June. On the other hand, the PMIs for medium- and small-sized enterprises fell more sharply by 1.4pp and 1.2pp, respectively, to 49.1 and 47.4, both below the expansion/contraction threshold of 50," it said.

A sub-index of new orders fell to 50.5 from 50.7, while the production sub-index rose to 52.5 from 52.3.

Meanwhile, data from the National Bureau of Statistics showed China's official non-manufacturing PMI, which covers services such as retail and real estate, improved to 53.7 from 53.1 in May.

The services sub-index edged up to 52.2 from 52 in May, while the construction sub-index jumped to 62.0 from 59.4.

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