Chinese Manufacturing Activity Contracts in June

Two indicators of Chinese manufacturing are pointing to continued pressure from the US trade war as activity fell to its lowest level since January.

The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) released on Monday fell to 49.4, down from 50.2 in May. This followed Sunday’s official PMI numbers which were at 49.4.

Both indicators are an early gauge of sentiment by Chinese factory operators. Numbers above 50 show expansion, while numbers below tend to show contraction. The private Caixin/Markit includes more small, private firms, while the official PMI from the Chinese National Bureau of Statistics includes more large, state-owned firms.

The decline was not expected and is below economist predictions. Some analysts say the PMI numbers show a cooling demand for manufacturing in China, that could be caused by the uncertainty of US tariffs and/or a downturn in global growth.

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