Well-known Chinese news site Sina recently reported that the just-released Caixin Chinese Manufacturing PMI June number reached 49.4, which indicated a decline in the manufacturing sector. This number is in line with the Manufacturing PMI index that China’s National Bureau of Statistics released a couple of days earlier. It was also 49.4. It is unusual for these two independent indicators to be exactly the same. In June, China’s total manufacturing industrial output suffered a decline. Employment in manufacturing continued to shrink. Many manufacturers did not hire people to fill the vacancies freed up by workers who left their job. The new order level continued to see a decline. Product inventory level decreased due to the production slowdown and the companies have been filling orders with inventory. Manufacturers are reducing the purchasing volume for raw materials. In June, the average cost reached a seven-month high and the product price saw a slight increase as well. PMI (Purchasing Managers Index) is an indicator of financial activity reflecting purchasing managers’ acquisition of goods and services. A PMI number below 50 typically reflects a decline.
Source: Sina, July 1, 2019