Factory activity in China has continued to decline for the second month in a row in June. This poses challenges for the world’s second-largest economy as it prepares for the upcoming third plenum next month. The official manufacturing purchasing managers’ index (PMI) remained at 49.5 in June, the same as May, according to the National Bureau of Statistics. A reading below 50 indicates a contraction in activity, while above 50 suggests expansion.
The new manufacturing export order subindex also remained unchanged at 48.3 in June. On the other hand, the non-manufacturing PMI, which measures sentiment in the service and construction sectors, fell to 50.5 in June, down from 51.1 in May. Despite this drop, the non-manufacturing sector has been in expansion territory for the past six months.
The third plenum, where top Communist Party officials will gather in Beijing in two weeks, is expected to unveil major economic strategies for the next five to 10 years. This delayed meeting is highly anticipated and will provide crucial insight into the direction of China’s economy.