A closely watched private index on Chinese manufacturing slips, as expected
- Caixin/Markit releases manufacturing Purchasing Managers' Index for June.
- Economists polled by Reuters had expected the Caixin/Markit index to fall slightly to 51.0 in June from May.
A closely watched index on China's economic activity met expectations in June.
The private Caixin/Markit manufacturing PMI came in at 51.0, slightly lower from 51.1 in May as new export sales fell for the third straight month, said a joint press release.
Economists polled by Reuters had expected the Caixin/Markit index to slip to 51.0 in June from May.
On Saturday, China released its official PMI which also showed manufacturing activity fell — to 51.5 in June from 51.9 in May. The June new export orders index contracted for the first time since February, dropping to 49.8 from 51.2 in May.
Still, the two headline PMI readings were above 50 — indicating expansion in manufacturing activity. A reading below 50 signals contraction.
The Caixin/Markit index for new export orders fell to its lowest level this year and was in contraction territory "pointing to a grim export situation amid escalating trade disputes between China and the U.S., which led to weak demand across the manufacturing sector," said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, a Caixin subsidiary.
China's official PMI gauge focuses on large companies and state-owned enterprises, while the reading by Caixin and IHS Markit focuses on small and medium-sized enterprises.
Economic data from China is being closely watched amid trade tensions between and . U.S. are expected to take effect on July 6, with China set to retaliate with duties of its own on the same value of American goods.
There are fears that the impending trade spat between the world's two largest economies could hit the markets and even the world economy.