Over the weekend we had the official PMIs
- Weekend data – China’s offiical PMIs for June were mixed, disappointing on the whole
The Caixin / S&P Global Manufacturing PMI out now is the second Manufacturing PMI for June 2024 .
Comes in at 51.8, the highest since May of 2021 and the eighth consecutive reading above 50
- expected 51.2, prior 51.7
From the report, in brief:
- Demand also rose, keeping the subindex
for total new orders in expansionary territory for the 11th consecutive month.
Demand for consumer and intermediate goods was stronger than that for
investment goods. Exports continued to grow, but at the slowest pace in six
months, indicating slightly weaker overseas demand. - The job market stabilized somewhat. Although the employment subindex
remained in negative territory for 10 months consecutively, the magnitude
of the contraction moderated in June, suggesting that the number of
companies expanding their workforce was roughly equal to those reducing
it. The employment picture was better at companies making consumer and
intermediate goods than at those producing investment products. - Prices rose slightly in June. Higher prices of raw materials such as steel,
copper and aluminum coupled with rising freight costs pushed up input
costs, causing the corresponding gauge to hit its highest in two years. Output
prices ticked up, with the indicator entering expansionary territory for the
first time this year.
***
China has two primary Purchasing Managers’ Index (PMI) surveys – the official PMI released by the National Bureau of Statistics (NBS) and the Caixin China PMI published by the media company Caixin and research firm Markit / S&P Global.
- The official PMI survey covers large and state-owned companies, while the Caixin PMI survey covers small and medium-sized enterprises. As a result, the Caixin PMI is considered to be a more reliable indicator of the performance of China’s private sector.
- Another difference between the two surveys is their methodology. The Caixin PMI survey uses a broader sample of companies than the official survey.
- Despite these differences, the two surveys often provide similar readings on China’s manufacturing sector.
This article was written by Eamonn Sheridan at www.forexlive.com.
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