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.”
