Not a slack season! China's manufacturing PMI rebounded in June, and the macroeconomic recovery continues

In June, China's manufacturing production entered the traditional off-season, but the Purchasing Managers' Index (PMI) for China's manufacturing sector continued its upward trend, reaching a three-month high.

Data released on June 30 by the Service Industry Survey Center of the National Bureau of Statistics and the China Federation of Logistics and Purchasing showed that in June, China's manufacturing PMI rose to 49.7%, up 0.2 percentage points from the previous month, currently at its highest point since April; among the 21 industries surveyed, 11 were in the expansion range, an increase of 4 from the previous month, indicating an expansion of the manufacturing sector's positive outlook.

“China's manufacturing PMI in June performed better than seasonally expected.” said Wen Bin, chief economist at China Minsheng Bank.

June falls in early summer, with southern China entering the rainy season and the north experiencing high temperatures. Manufacturing production entered the traditional off-season, but China's manufacturing PMI continued its upward trend, showing a characteristic of being not weak during the off-season, which is conducive to boosting market confidence.

The manufacturing PMI is an important leading indicator reflecting the operation of the macroeconomic situation.

Wen Tao, an expert at the China Logistics Information Center, believes that since May, China's manufacturing PMI has risen for two consecutive months, indicating that the macroeconomic situation continues to recover.

“The slight rebound in China's manufacturing PMI in June shows that the effects of a series of incremental policies continue to be apparent.” said Zhang Liqun, a researcher at the Macroeconomic Research Department of the Development Research Center of the State Council.

The non-manufacturing business activity index and the comprehensive PMI output index, also released on the same day, further confirmed the experts' judgment, with the two indices standing at 50.5% and 50.7% respectively, up 0.2 and 0.3 percentage points respectively from the previous month.

Zhao Qinghe, senior statistician at the Service Industry Survey Center of the National Bureau of Statistics, believes that the rebound in the three indices indicates that China's economic activity level generally remains in expansion.

From the perspective of China's manufacturing PMI sub-indices, in June, the production index, new orders index, new export orders index, backlog orders index, finished goods inventory index, purchasing quantity index, import index, purchase price index, factory price index, raw material inventory index, and supplier delivery time index all increased compared to the previous month, with increases ranging from 0.2 to 2.6 percentage points; the employment index and production and business activity expectation index decreased compared to the previous month, with decreases of 0.2 and 0.5 percentage points respectively.

“The rebound in order-related indices reflects the apparent effects of policies to expand domestic demand; the rise in the production index and purchasing quantity index reflects a warming trend in business operations.” Zhang Liqun said.

Specifically looking at both supply and demand, in June, the manufacturing production index and new orders index were 51.0% and 50.2% respectively, up 0.3 and 0.4 percentage points from the previous month, indicating accelerated manufacturing production activities and improved market demand.

“In June, with the temporary easing of Sino-US trade relations and the weakening of external interference factors, China's manufacturing sector returned to its normal operating track, the economy's internal driving force was steadily released, overall market demand stopped falling and rebounded, and the new orders index returned to the expansion range after running below 50% for two consecutive months.” Wen Tao said that driven by the rebound in demand, business activities maintained steady expansion, and the production index rose compared to the previous month.

Meanwhile, the manufacturing export situation is also improving. In June, the new export orders index was 47.7%, up 0.2 percentage points from the previous month.

“The performance of the new orders index and the new export orders index in June was significantly better than seasonal expectations, with the improvement in new orders exceeding that of new exports, indicating that domestic demand was slightly better than external demand.” Wen Bin said.

In addition, Wen Bin noted that in June, the finished goods inventory index rose by 1.6 points to 48.1%; raw material inventories rose by 0.6 percentage points to 48.0%, indicating a stronger willingness of enterprises to replenish inventories.

From the perspective of manufacturing price trends, in June, the main raw material purchase price index and the factory price index were 48.4% and 46.2% respectively, both up 1.5 percentage points from the previous month, indicating an overall improvement in manufacturing market prices. Experts believe this is beneficial to improving the profitability of some enterprises.

In terms of key industries, in June, the PMI for equipment manufacturing, high-tech manufacturing, and consumer goods industries were 51.4%, 50.9%, and 50.4% respectively, all remaining in the expansion range for two consecutive months; the PMI for high energy-consuming industries was 47.8%, up 0.8 percentage points from the previous month, indicating an improvement in the level of activity.

“In June, a prominent highlight of China's economic operation was the relatively widespread recovery trend, with all four industry indices rising compared to the previous month, showing a coordinated and positive operating trend.” Wen Tao said.

From the perspective of manufacturing enterprises, in June, the PMI for large enterprises was 51.2%, up 0.5 percentage points from the previous month, remaining in the expansion range; the PMI for medium-sized enterprises was 48.6%, up 1.1 percentage points from the previous month, recovering after two consecutive months of weakness; the PMI for small enterprises was 47.3%, down 2.0 percentage points from the previous month.

“Overall, in the second quarter of 2025, affected by changes in US tariff policies, manufacturing operations fluctuated slightly in the short term, but China's economy showed strong resilience, the recovery pace quickly stabilized after a short-term slowdown, internal driving forces continued to exert force, and enterprise production operated steadily.” Wen Tao said that in the second half of the year, China will focus on promoting "strengthening the domestic market" and "stabilizing the external market". It is expected that in the second half of the year, in the absence of major external shocks, as the policy "combination punch" further exerts its force, China's manufacturing sector is expected to maintain a steady growth trend. (Xinhua Finance Anna Sun Guangjian)