Chinese manufacturing activity slowed in June, a survey by the China Federation of Logistics and Purchasing, or CFLP, and the National Bureau of Statistics revealed Monday, adding to concerns that the economy may continue to lose momentum in the second quarter.
The headline purchasing managers' index fell to 50.1 in June from 50.8 in May. Although readings above 50 indicate expansion of the sector, the latest score signified a near stagnation in activity.
The new orders index fell to 50.4 in June from 51.8 in May. The production index also declined, to 52 from 53.3 in the preceding month.
A separate survey by Markit Economics and the HSBC released ahead of the official data revealed that the manufacturing PMI fell to a nine-month low of 48.2 in June from 49.2 in May. The reading was a tad below the flash score of 48.3.
The reading suggested marginal contraction in business activity in the factory sector. "Operating conditions have now worsened for two successive months," Markit said.
Production contracted for the first time since October last year. New export orders fell at the fastest rate since last September. Not considering September, this was the sharpest decline since March 2009.
"The recent cash crunch in the interbank market is likely to slow expansion of off-balance sheet lending, further exacerbating funding conditions for SMEs," said Hongbin Qu, Chief Economist at HSBC. "As Beijing refrains from using stimulus, the ongoing growth slowdown is likely to continue in the coming months," Hongbin said. A liquidity squeeze felt more than a week ago in Chinese interbank market sent ripples around the world. The markets feared it could further harm growth, which was already hit by the government's economic reforms. Later, the central bank stepped in to calm that markets.
Last Friday, People's Bank of China Governor Zhou Xiaochuan vowed to maintain stability in the financial markets and "adjust" liquidity as and when required.
For comments and feedback contact: editorial@rttnews.com
Business News
May 22, 2026 14:46 ET Minutes of the latest Fed policy session was the highlight of the week along with survey data on the U.S. housing market. In Europe, survey data signaled the trends in the euro area private sector. Further, consumer price inflation data from the U.K. was in focus. In Asia, various economic indicators from China drew attention to the health of the economy.