China’s June factory activity quickens, but exporters struggle amid pandemic

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BEIJING (Reuters) – China’s factory activity expanded at a stronger pace in June, as the economy continues to recover after the government lifted strict lockdowns and ramped up investment, but export orders remained weak as the global coronavirus crisis shatters demand.

The official manufacturing Purchasing Manager’s Index (PMI) came in at 50.9 in June, compared with May’s 50.6, National Bureau of Statistics (NBS) data showed on Tuesday, and was above the 50.4 forecast in a Reuters poll of analysts.

The 50-point mark separates expansion from contraction on a monthly basis.

The uptick was underpinned by the quickening pace of expansion in production, which grew to 53.9 in June from 53.2 the previous month.

The forward-looking total new orders gauge also brightened, rising to 51.4 from May’s 50.9, suggesting domestic demand is picking up as industries from non-ferrous metals to general equipment and electrical machinery all showed an improvement.

But export orders continued to contract, albeit at a slower pace, with a sub-index standing at 42.6 compared to 35.3 in May, well below the 50-point mark.

“Although the PMI index picked up this month and the manufacturing sector recovered steadily, it is also important to see that uncertainty remains,” NBS official Zhao Qinghe said in a statement accompanying the data.

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