Caixin PMI's June Reading Was 53.9, Shows Weak Local Demand
Caixin PMI, which is a measure of China's service sector growth, expanded at a much slower pace than the market expectations. The Caixin PMI reading for June was 53.9, while the market was expecting a 56.2 reading.
Just a month earlier, the Caixin PMI reading was 57.1, which tells us that the services sector is in decline instead of sustainable growth. According to experts, the weakness in local demand and soft exports have made it difficult for China to stage an economic recovery.
Caixin PMI: The Worst Reading Of 2023
Overall, the Caixin PMI reading for June was one of the worst since the start of 2023 and highlighted the severity of the situation.
During June, an increase in supply & demand was witnessed, but the pace was not strong enough to push the Caixin PMI index higher.
During the same month, tourism in China also picked up, but it only provided a limited boost to the services sector. At the same time, the Chinese government has also continued its stimulus measures to support the local demand.
But all the rate cuts, liquidity injections, & other measures are not good enough to revive the country's fast economic growth.
According to senior economists, the indexes which measure new orders and business activity remained above the 50 mark for the 6th month in a row. However, it still remains at one of its lowest readings which were only last seen during December and January.
As per the reading of Caixin PMI, the non-manufacturing activity & the manufacturing activity slowed during the month of June.
Another official survey also revealed the same results as seen in the Caixin PMI, which adds credibility to the above-mentioned findings.
Looking ahead, the rebound of Asia's largest economy is now in jeopardy which will send shockwaves around the world. After all, its the 3rd month in a row that the manufacturing activity in China has contracted.