China’s Caixin Services PMI for June plunged to 53.9, down from 57.1 in the previous month and significantly below the expectation of 56.2. The composite PMI also tumbled from 55.6 to a discouraging 52.5, marking the lowest readings since the growth cycle kick-started in January.

Wang Zhe, a senior economist at the Caixin Insight Group, commented on the less-than-promising data: “A slew of recent economic data suggests that China’s recovery has yet to find a stable footing, with prominent issues including a lack of internal growth drivers, weak demand, and dimming prospects persisting.”

Zhe emphasized the disparity between the manufacturing and services sectors, noting that “In June, Caixin China PMIs showed that conditions in the manufacturing sector lagged far behind services. Employment contracted, deflationary pressure mounted, and optimism waned in the manufacturing sector.”

Despite the ongoing post-Covid rebound of the services sector, Zhe expressed concerns about the sustainability of the recovery, adding that “the services sector continued a post-Covid rebound, but the recovery was losing steam.”

Full China Caixin PMI services release here.

China’s Caixin PMI Manufacturing for June recorded a slight decline from 50.9 in May to 50.5. slightly above expectation of 50.2. Caixin indicated that while output marginally increased, demand growth remained modest. Meanwhile, input prices experienced their sharpest decline since January 2016, and business confidence sank to an eight-month low.

Wang Zhe, Senior Economist at Caixin Insight Group, summed up the situation: “Manufacturing activity growth suffered a marginal slowdown.”

“A slew of recent economic data suggests that China’s recovery has yet to find a stable footing, as prominent issues including a lack of internal growth drivers, weak demand and dimming prospects remain,” Wang added.

“Problems reflected in June’s Caixin China manufacturing PMI, ranging from an increasingly dire job market to rising deflationary pressure and waning optimism, also point to the same conclusion.”

Full China Caixin PMI manufacturing release here.

June saw a modest uptick in China’s NBS PMI Manufacturing from 48.8 to 49.0, missing expectation of 49.5. The manufacturing sector remains in contractionary state, albeit with a slight improvement from the previous month.

In some details of PMI Manufacturing, new orders improved slightly, climbing to 48.6 from May’s 48.3. However, new export orders saw a five-month low at 46.4, suggesting weakening demand from overseas. Employment fell from 48.4 to 48.2.

In parallel, PMI Non-Manufacturing dropped from 54.5 in May to 53.2 in June, underperforming 53.7 forecast. This decline marks the weakest reading index since December. Employment sub-gauge for non-manufacturing sector fell noticeably, from 48.4 to 46.8.

Additionally, PMI Composite, which combines both manufacturing and service sector activity, declined from 52.9 to 52.3. This lower figure highlights a broader slowdown in China’s economic activity beyond manufacturing alone.