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PMI round-up: Good news in China

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(Kitco News) – It is PMI day all over the world and it has been a mixed bag so far heading into the US numbers. Overnight there was some positive news from China and Australia as both nations remained in expansionary territory and Chinese manufacturers printed the first expansion of output since February at the end of the Q2. The rate of growth was the quickest seen since November 2020 and sharp, with a number of firms linking the rise to the return to more normal operations and reopening of production lines as COVID-19 restrictions were eased. Furthermore, there was good news for the sector as the Chinese government announced a $45bln stimulus program to pay for infrastructure projects.

In Europe so far, the main EZ reading printed just slightly higher than the analyst consensus. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said “Eurozone manufacturing has moved into decline in June, with production dropping for the first time for two years amid a steepening downturn in demand. Orders for goods have fallen at an accelerating rate over the past two months, dropping in June in every country surveyed with the exception of the Netherlands, and even here the rate of growth has weakened markedly in recent months.”. It was pretty much the same in the German report although the numbers gave a flat reading compared to the expectations and previous.

In the UK, output growth slowed to near-stagnation pace and new order intake fell for the first time since January 2021. Raw material shortages, the war in Ukraine, and inflationary pressures seemed to be the main concern. On the plus side, the report said job growth was registered for the eighteenth successive month in June. Increased employment was linked to higher output, staff shortages, and efforts to reduce backlogs of work (which fell for the second month running). Staffing levels rose across the consumer, intermediate, and investment goods sectors and at small, medium, and large-sized producers.

UK Manufacturing PMI (Jun) 52.8 (est 53.4; forecast 54.6)

Eurozone S&P Global Manufacturing PMI Jun F: 52.1 (est 52.0; forecast 52.0)

Germany S&P Global/BME Manufacturing PMI Jun F: 52.0 (est 52.0; forecast 52.0)

China Caixin Manufacturing PMI Jun: 51.7 (est 50.2; prev 48.1)

Australia Manufacturing PMI Jun F: 56.2 (prev 55.8)


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