A private gauge measuring China’s factory activity rebounded to its highest level in a year, pointing in the same direction as the official gauge to reflect an economic recovery from the impact COVID-19 lockdowns.
The Caixin China purchasing managers index rose to 51.7 in June, up from 48.1 in May, ending a three-month streak of contraction, according to data released Friday by Caixin Media Co. and S&P Global. The 50 mark separates expansion from contraction.
The reading, the highest level since May 2021, is in line with the competing official gauge released Thursday that stood at 50.2, also following three months of contraction.
Chinese manufacturers registered the first output expansion since February. Total new orders also returned to growth in June and new export orders rose.
Despite the rebound in activity, manufacturers remained relatively cautious about hiring staff, with employment falling for the third month in a row. While supply hasn’t recovered fully, some companies surveyed by Caixin reported sharp drops in suppliers’ delivery times.
Deteriorating household income and expectations caused by a weak labor market damped the demand recovery, said Wang Zhe, an economist at Caixin Insight Group.
