Investing.com -- Chinese manufacturing activity edged past expectations in June, a private survey showed on Monday, but the pace of growth still slowed from May amid softening export demand and worsening optimism over the economy.
The Caixin manufacturing purchasing manufacturers index read 5.05 for June, higher than expectations for a reading of 50.2 but slower than the prior month’s reading of 50.9.
While a reading above 50 indicates growth, June’s data slowed from May's reading, which showed activity growing at its fastest pace in 11 months.
Still, the data contrasts the results of a government survey last week, which showed that China’s manufacturing activity contracted for a third straight month in June.
The Caixin reading differs from the official survey, in that it focuses more on smaller, private enterprises, as opposed to the bigger, state-run enterprises surveyed by the official survey.
This also shows that some facets of China’s manufacturing sector have remained resilient despite a broader slowdown in the country’s economy.
Caixin Insights said in a note that manufacturers saw improved domestic sales over the past month, while exports remained largely flat. But the survey showed that disinflation still remained in play, with input costs for manufacturing falling at a pace last seen in 2016.
The broader Chinese economy is struggling to recover despite the lifting of anti-COVID restrictions earlier this year, with private spending remaining limited, while government stimulus efforts failed to yield a positive response so far in the year.
“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 Zhe, senior economist at Caixin Insight Group said in a note.
Zhe also noted that Chinese businesses were growing less optimistic about the country’s economic prospects this year, amid persistent concerns over sluggish market conditions.