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China's Manufacturing Activity Slows to Three-Month Low, RatingDog Says

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China's Manufacturing Activity Slows to Three-Month Low, RatingDog Says

China's manufacturing sector growth slowed in June to a three-month low despite new orders increasing for the 13th straight month, according to data released by S&P Global on Wednesday.

The headline RatingDog China General Manufacturing Purchasing Managers' Index, or PMI, compiled by S&P Global, eased to a three-month low of 51.7 from 51.8 in the previous month and missed the 51.9 market expectation tracked by Investing.com.

A reading above 50 indicates an expansion in sector performance compared with the prior month, while a figure below signals a contraction.

The June reading remained above the long-run survey trend of 50.8 since 2004, RatingDog said in its note.

The increase in new orders for the thirteenth consecutive month helped with manufacturing production, which expanded for a seventh straight month,

However, the pace eased to a three-month low, RatingDog Founder Yao Yu said in a statement.

Manufacturers also increased staffing levels for the first time in three months in June, and job creation saw the strongest growth since August 2023.

Despite the increase in manpower, backlogs still rose for the fifth consecutive month, and manufacturers were still able to increase inventories of finished goods for three months and counting.

The private PMI reading, when taken together with Tuesday's official releases, could show consistency with a pick-up in economic momentum, Bloomberg reported Wednesday, citing Capital Economics' China Economics head Julian Evans-Pritchard.

The official PMI came in at 50.3, rising from a neutral mark of 50 in the month-ago period, the National Bureau of Statistics said Tuesday.

China's NBS measured manufacturing PMI for the computer, communication, and electronic equipment segment at 54 in June, Statistician Huo Lihui said in a press release Tuesday.

The increase in the PMIs "has been heavily dependent on exports and AI-related tech," Bloomberg quoted Evans-Pritchard as saying.

The overconcentration on AI has been "limiting the net contribution to real economic growth," Nomura economists said in a different note released Tuesday.

"However, this export surge was largely concentrated in AI-related sectors, which simultaneously drove higher imports,

Business sentiment remained positive but softened to its lowest level since January, Yao said.

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