A private gauge of China's factory activity rebounded in June to show an expansion, indicating an improvement in the manufacturing sector that tallied with official data released last week.
The Caixin China manufacturing purchasing managers' index rose to 50.4 in June from 49.6 in May, showing a rise in activity, Caixin Media Co. and research firm Markit said on Monday. The 50 level separates an expansion in manufacturing activity from a contraction.
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Subindexes of new orders and production rose marginally from May, while input and output prices showed renewed increases, said Caixin. But subindexes for stocks of inventories and stocks of finished goods were both in contraction territory, signaling that businesses are still cautious about restocking, it said.
"The manufacturing sector recovered slightly in June, but based on the inventory trends and confidence around future output, the June reading was more like a temporary rebound, with an economic downtrend likely to be confirmed later," Zhengsheng Zhong, an economist at CEBM Group, said in a statement accompanying Monday's release.
The Caixin PMI reading comes after China's official manufacturing PMI, a competing government gauge, jumped to 51.7 in June, the National Bureau of Statistics said on Friday.
The Caixin China Manufacturing PMI is based on monthly data compiled from replies to questionnaires sent to purchasing executives at more than 400 manufacturing companies.
Compared with the official gauge, the Caixin PMI tends to track more closely small private manufacturers in China that haven't benefited as much from government stimulus policies as state-owned firms.
-- Grace Zhu
(END) Dow Jones Newswires
July 02, 2017 22:20 ET (02:20 GMT)