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China’s Caixin factory activity index hits 3-year high, beating forecasts, but demand still slow
- China’s Caixin/S&P Global manufacturing purchasing managers’ index rose to 51.8 in June, a three-year high that beat private and official estimates
China’s manufacturing activity grew at the fastest pace in more than three years due to production gains even as demand growth slowed, a private sector survey showed on Monday, indicating the health of the sector remained robust.
Manufacturing output growth hit a two-year high in June. The orders index, which gauges demand, including the overseas orders index, remained in expansionary territory last month, but at a slower rate.
Demand for consumer and intermediate goods was stronger than that for investment goods, said the survey.
The survey showed business owners are facing rising costs driven by higher prices of raw materials such as steel, copper and aluminium and rising freight costs. The input subindex, hence, rose at its fastest pace in two years.
“Insufficient market confidence and effective demand remain key challenges,” said Wang Zhe, senior economist at Caixin Insight Group.
Manufacturing producers’ confidence for the next 12 months hit its lowest point since November 2019, due to concerns over rising competition and uncertainty about the economic outlook.
The industry is still scaling back hiring in June.
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