China's manufacturing sector maintained its upward trajectory in June, extending its streak of monthly growth to seven consecutive months. According to the RatingDog China General Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, the private sector index registered 51.7 in June, a slight easing from May's reading of 51.8 but still above the market consensus forecast of 51.6. For context, the 50-point mark divides expansion from contraction. The average PMI reading for the second quarter stood at 51.9, establishing the strongest quarterly performance for the sector since the fourth quarter of 2020.
An official survey released on Tuesday corroborated the expansion narrative, noting that factory activity returned to growth territory. This rebound was largely fueled by surging demand for semiconductors, computers, and other artificial intelligence-related products. Under the private RatingDog survey, output expanded for the seventh straight month, although the pace of growth slowed to its weakest level in three months. On the labor front, employment increased for the first time in three months, marking the most significant job creation since August 2023. Despite higher staffing levels, work backlogs also rose for a fifth consecutive month, indicating that firms were grappling with rising workloads alongside their expanded teams.
The demand landscape presented a mixed picture. Overall new orders climbed for the 13th straight month, matching the longest continuous expansion streak observed since 2018. However, new export business contracted for a second consecutive month, reflecting softer external demand. While export charges continued to rise, they did so at the slowest pace recorded since March, suggesting a stabilization in pricing pressures for overseas transactions.