United States manufacturing activity hits 14-month high

Marco Green
July 2, 2020

China's factory activity grew at a faster rate in June after the government lifted lockdown measures and ramped up support steps, but the health crisis continues to pressure exports and jobs, a private business survey showed on Wednesday.

The Institute for Supply Management (ISM) said its index of USA factory activity jumped to a reading of 52.6 last month, unexpectedly vaulting over the 50 mark that separates growth from contraction.

This was slightly above economists' forecasts, as analysts polled by Reuters expected the index to stand at 50.4, and those surveyed by Bloomberg predicted 50.5.

Japan's PMI rose to a seasonally adjusted 40.1 in June, while South Korea's PMI ticked up to 43.4 - both remaining far below the rise-or-fall threshold of 50.

Asia's factory managers saw glimmers of hope last month, with the region's purchasing managers' indexes (PMIs) turning up across the board as demand from China picked up.

As major global economies reopen, China's manufacturing import and export index has rebounded from a low level in June, said Zhao. The production component of the index also rose by more than 24 points to 57.3. Several manufacturing industries, including petroleum processing and electrical machinery, rebounded by more than 10 percentage points.

United States manufacturing activity rebounded in June, hitting its highest level in more than a year as the broader economy reopened, but rising Covid-19 infections threaten the recovery.

The PMI for 14 of the 21 surveyed sectors registered a reading above 50, an increase of five from last month, NBS data showed.

"Company data suggest online retail sales, which account for 20% of total retail sales, have been quite solid in June", it wrote, underlining that e-commerce giant JD.com reported a transaction volume of 269.2 billion yuan during its shopping festival between June 1 and 18.

"We're still awaiting signs of meaningful improvement in Japan's manufacturing sector, with the PMI for June failing to stage a substantial recovery".

"The host of PMI data released this morning offers some reassuring signs that the outlook for the crucial manufacturing sector continues to be on the mend", said Mr Wellian Wiranto, an economist at OCBC Bank.

The Purchasing Managers Index is constructed from the results of surveys of executives in manufacturing businesses.

Other reports by Click Lancashire

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