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Reuters
03-07-2025
- Business
- Reuters
China's services activity growth hits 9-month low in June, shows Caixin PMI
BEIJING, July 3 (Reuters) - China's services activity expanded at the slowest pace in nine months in June, as demand weakened and new export orders declined amid a fragile trade truce with the United States, a private-sector survey showed on Thursday. The Caixin/S&P Global services purchasing managers' index (PMI), fell to 50.6 from 51.1 in May, marking the weakest expansion since September 2024 but remaining above the 50-mark separating expansion from contraction. The reading was broadly in line with China's official survey, which showed services activity easing slightly to 50.1 from 50.2 the previous month. The Caixin PMI is considered a better read of trends among smaller, export-oriented firms, particularly along the east coast, while the official PMI primarily tracks large and medium-sized enterprises, including state-owned companies. "Recently, major macroeconomic indicators have shown divergence, with consumption in certain sectors increasing beyond expectations, while the momentum of growth in investment and industrial production has weakened," said Wang Zhe, Senior Economist at Caixin Insight Group. "We must recognise that the external environment remains severe and complex, with increasing uncertainties. The issue of insufficient effective demand at home has yet to be fundamentally resolved," Wang added. Deepening deflationary pressures and a persistent property crisis continued to undercut demand and growth in the world's second-largest economy. While the U.S. and China have settled on a framework trade deal, analysts expect eventual U.S. tariffs to remain well above historic levels, maintaining pressure on exporters and officials to find alternative markets or boost domestic demand. Expansion in both supply and demand moderated in June, with the new orders sub-index slowing. External uncertainties weighed on service exports, leading to a decline in new export business for the second consecutive month, the fastest rate of contraction since December 2022. Service providers remained cautious on hiring, leading the employment sub-index to decline in June after a previous increase. This led to the fastest accumulation of outstanding business in a year. A slower increase in average input costs, combined with competitive pressures, resulted in the steepest decline in output charges in over three years in June, suggesting intense market competition. While overall sentiment within the service sector stayed positive, business expectations remained largely unchanged from May. The Caixin China General Composite PMI rose to 51.3 in June from 49.6 the previous month.
Business Times
03-07-2025
- Business
- Business Times
China services activity weakens to nine-month low in new hurdle
[BEIJING] China's services activity slipped more than forecast to reach a nine-month low, a private survey showed, a worry for the economy as higher US tariffs threaten exports. The Caixin China services purchasing managers' index (PMI) fell to 50.6 in June from 51.1 the month before, according to a statement from Caixin and S&P Global on Thursday (Jul 3). The median forecast of economists surveyed by Bloomberg was 50.9, with any reading above 50 indicating an expansion. A weak jobs market and slower wage growth are keeping consumers on edge, even as a tariff truce with the US contributes to a rebound in trade and supports factory output. With the official services PMI showing a slight deterioration last month, the statistics bureau has also pointed to the fading boost from holidays in May. A measure of new export business for services dropped in June, with job shedding recorded for the third time in the past four months, the latest PMI report showed. Companies cut their selling prices at the fastest pace since April 2022, likely as a result of intense market competition, it said. 'Employment declined,' said Wang Zhe, senior economist at Caixin Insight Group. 'Expansion in supply and demand slowed. Despite businesses' efforts to pursue new customers, growth in demand was limited.' Signs of improvement in manufacturing and construction in June have created fresh doubt over the likelihood of further stimulus efforts by Beijing in the face of higher US tariffs. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Property prices are struggling to bottom out, however, weighing on household wealth and confidence while persistent deflation saps consumer demand. China's central bank issued a more optimistic assessment of the economy after its latest policy meeting. That's led some analysts to argue the urgency for stimulus has decreased in the near term, as the pace of economic expansion stays on track to hit the official target of around 5 per cent in the second quarter. The official non-manufacturing PMI, which measures activity in construction and services, came in at 50.5 in June, slightly above the consensus forecast of 50.3. A sub-gauge for services has hovered around the 50-point line that separates contraction from expansion since the start of the year. The private and official surveys cover different sample sizes, locations and business types, with the Caixin report focusing on small and medium-sized firms in the non-state sector. China's services consumption accounts for only 18 per cent of economic output, according to JPMorgan Chase, less than half the share in the US. 'China's low consumption mainly reflects low service consumption, rather than weak goods consumption,' analysts at JPMorgan said in a report last month. BLOOMBERG
Business Recorder
02-07-2025
- Business
- Business Recorder
Tariff risks muddy global outlook for factories
WASHINGTON/ LONDON/ TOKYO: Worries over future US tariffs are clouding the outlook for factories across much of the United States, Asia and Europe, according to surveys released on Tuesday which nonetheless showed some were able to shrug off the uncertainty and keep growing. Among the bright spots, Japan's manufacturing read-out showed growth for the first time in 13 months, South Korea's activity contracted at a milder pace and China's Caixin PMI index also expanded in June - confounding an official survey that showed activity shrinking for a third straight month. In Europe, Ireland, Spain and the Netherlands were among the star performers even as the wider euro zone read-out was broadly flat and Britain continued to contract, albeit more slowly. Analysts said the underlying softness in surveys highlights the challenges facing businesses and policymakers as they try to navigate US President Donald Trump's moves to shake up the global trade order with sweeping tariffs. 'We must recognise that the external environment remains severe and complex, with increasing uncertainties,' said Wang Zhe, economist at Caixin Insight Group. The Caixin/S&P Global survey showed Chinese manufacturing PMI rose to 50.4, surpassing expectations in a Reuters poll. Japan's final au Jibun Bank PMI rose to 50.1 due to an upswing in output, but overall demand remained weak as new orders shrank on concern over US tariffs. Factory activity in South Korea contracted for the fifth straight month though the pace of decline eased on relief over a snap presidential election on June 3 that ended six months of uncertainty. In manufacturing, India was a significant outlier in the region last month, as activity accelerated to a 14-month high, driven by a substantial rise in international sales that helped spark a record-breaking spurt in hiring. That said, US activity contracted for a fourth straight month in June, the Institute for Supply Management reported, joining housing spending unemployment DEADLINE Negotiators from major US trading partners are rushing to reach deals with Trump's administration by a July 9 deadline to avoid import tariffs jumping to higher levels. While China is continuing its negotiations for a broader trade deal with the US, Japan and South Korea have so far failed to win concessions on the tariffs imposed on their mainstay export items like automobiles. The 27-member European Union is embarking on new talks in Washington later this week. The euro zone HCOB manufacturing Purchasing Managers' Index, compiled by S&P Global, edged up to 49.5 in June from 49.4 in May, its highest level since August 2022 - but still remaining below the 50 mark denoting growth in activity. Moreover, national surveys revealed stark differences across the currency bloc. Ireland recorded the highest PMI at a 37-month peak of 53.7, while Greece, Spain, and the Netherlands also posted readings above 50. 'We seem to be in a sweet spot at the moment where it's domestic activity that's driving the index,' John Fahey, senior economist at AIB, said of the Irish read-out. 'There may be some level of activity and investment that was postponed for two or three years, and you're just at the point now where that has to happen, even though there's a more uncertain global backdrop.' While Germany's manufacturing PMI reached its highest in nearly three years, it still indicated contraction. France, Italy and Austria on the other hand registered faster declines in manufacturing conditions. In Britain, outside the European Union, the manufacturing sector showed some signs of turning a corner in its long slump. 'That said, any hoped for stabilisation remains fragile and subject to potential headwinds that could severely impact demand, supply chain reliability and future growth prospects,' said Rob Dobson, director at S&P Global Market Intelligence. Speaking at the start of a central bankers' annual get-together in Sintra, Portugal, European Central Bank President Christine Lagarde said the global environment had changed fundamentally since the inflation spurt of the pandemic years. 'The world ahead is more uncertain – and that uncertainty is likely to make inflation more volatile,' Lagarde said. Data on Tuesday showed euro zone inflation last month stood at the ECB's 2% target, confirming that the era of runaway prices is over. In the US, ISM reported its manufacturing PMI edged up to 49.0 from 48.5 in May thanks to a bit of shortening in long delivery times. Nonetheless, its measure of new orders fell for a fifth straight month, factory employment dropped and input prices ticked higher.
Qatar Tribune
01-07-2025
- Business
- Qatar Tribune
Tariff risks muddy global outlook for factories
Agencies Worries over future US tariffs are clouding the outlook for factories across much of Asia and Europe, according to surveys released on Tuesday which nonetheless showed some were able to shrug off the uncertainty and keep growing. Among the bright spots, Japan's manufacturing read-out showed growth for the first time in 13 months, South Korea's activity contracted at a milder pace and China's Caixin PMI index also expanded in June - confounding an official survey that showed activity shrinking for a third straight month. In Europe, Ireland, Spain and the Netherlands were among the star performers even as the wider euro zone read-out was broadly flat and Britain continued to contract, albeit more slowly. Analysts said the underlying softness in surveys highlights the challenges facing businesses and policymakers as they try to navigate US President Donald Trump's moves to shake up the global trade order with sweeping tariffs. 'We must recognize that the external environment remains severe and complex, with increasing uncertainties,' said Wang Zhe, economist at Caixin Insight Group. The Caixin/S&P Global survey showed Chinese manufacturing PMI rose to 50.4, surpassing expectations in a Reuters poll. Japan's final au Jibun Bank PMI rose to 50.1 due to an upswing in output, but overall demand remained weak as new orders shrank on concern over US tariffs. Factory activity in South Korea contracted for the fifth straight month though the pace of decline eased on relief over a snap presidential election on June 3 that ended six months of uncertainty. In manufacturing, India was a significant outlier in the region last month, as activity accelerated to a 14-month high, driven by a substantial rise in international sales that helped spark a record-breaking spurt in hiring. Negotiators from major US trading partners are rushing to reach deals with Trump's administration by a July 9 deadline to avoid import tariffs jumping to higher levels. While China is continuing its negotiations for a broader trade deal with the US, Japan and South Korea have so far failed to win concessions on the tariffs imposed on their mainstay export items like automobiles. The 27-member European Union is embarking on new talks in Washington later this week. The euro zone HCOB manufacturing Purchasing Managers' Index, compiled by S&P Global, edged up to 49.5 in June from 49.4 in May, its highest level since August 2022 - but still remaining below the 50 mark denoting growth in activity. Moreover, national surveys revealed stark differences across the currency bloc. Ireland recorded the highest PMI at a 37-month peak of 53.7, while Greece, Spain, and the Netherlands also posted readings above 50. 'We seem to be in a sweet spot at the moment where it's domestic activity that's driving the index,' John Fahey, senior economist at AIB, said of the Irish read-out. — Reuters 'There may be some level of activity and investment that was postponed for two or three years, and you're just at the point now where that has to happen, even though there's a more uncertain global backdrop.' While Germany's manufacturing PMI reached its highest in nearly three years, it still indicated contraction. France, Italy and Austria on the other hand registered faster declines in manufacturing conditions. In Britain, outside the European Union, the manufacturing sector showed some signs of turning a corner in its long slump. 'That said, any hoped for stabilization remains fragile and subject to potential headwinds that could severely impact demand, supply chain reliability and future growth prospects,' said Rob Dobson, director at S&P Global Market Intelligence. Speaking at the start of a central bankers' annual get-together in Sintra, Portugal, European Central Bank President Christine Lagarde said the global environment had changed fundamentally since the inflation spurt of the pandemic years. 'The world ahead is more uncertain – and that uncertainty is likely to make inflation more volatile,' Lagarde said. Data on Tuesday showed euro zone inflation last month stood at the ECB's 2% target, confirming that the era of runaway prices is over.
Kuwait Times
01-07-2025
- Business
- Kuwait Times
Tariff risks muddy global outlook for factories
LONDON/TOKYO: Worries over future US tariffs are clouding the outlook for factories across much of Asia and Europe, according to surveys released on Tuesday which nonetheless showed some were able to shrug off the uncertainty and keep growing. Among the bright spots, Japan's manufacturing read-out showed growth for the first time in 13 months, South Korea's activity contracted at a milder pace and China's Caixin PMI index also expanded in June - confounding an official survey that showed activity shrinking for a third straight month. In Europe, Ireland, Spain and the Netherlands were among the star performers even as the wider euro zone read-out was broadly flat and Britain continued to contract, albeit more slowly. Analysts said the underlying softness in surveys highlights the challenges facing businesses and policymakers as they try to navigate US President Donald Trump's moves to shake up the global trade order with sweeping tariffs. 'We must recognize that the external environment remains severe and complex, with increasing uncertainties,' said Wang Zhe, economist at Caixin Insight Group. The Caixin/S&P Global survey showed Chinese manufacturing PMI rose to 50.4, surpassing expectations in a Reuters poll. Japan's final au Jibun Bank PMI rose to 50.1 due to an upswing in output, but overall demand remained weak as new orders shrank on concern over US tariffs. Factory activity in South Korea contracted for the fifth straight month though the pace of decline eased on relief over a snap presidential election on June 3 that ended six months of uncertainty. In manufacturing, India was a significant outlier in the region last month, as activity accelerated to a 14-month high, driven by a substantial rise in international sales that helped spark a record-breaking spurt in hiring. Negotiators from major US trading partners are rushing to reach deals with Trump's administration by a July 9 deadline to avoid import tariffs jumping to higher levels. While China is continuing its negotiations for a broader trade deal with the US, Japan and South Korea have so far failed to win concessions on the tariffs imposed on their mainstay export items like automobiles. The 27-member European Union is embarking on new talks in Washington later this week. The euro zone HCOB manufacturing Purchasing Managers' Index, compiled by S&P Global, edged up to 49.5 in June from 49.4 in May, its highest level since August 2022 - but still remaining below the 50 mark denoting growth in activity. Moreover, national surveys revealed stark differences across the currency bloc. Ireland recorded the highest PMI at a 37-month peak of 53.7, while Greece, Spain, and the Netherlands also posted readings above 50. 'We seem to be in a sweet spot at the moment where it's domestic activity that's driving the index,' John Fahey, senior economist at AIB, said of the Irish read-out. — Reuters 'There may be some level of activity and investment that was postponed for two or three years, and you're just at the point now where that has to happen, even though there's a more uncertain global backdrop.' While Germany's manufacturing PMI reached its highest in nearly three years, it still indicated contraction. France, Italy and Austria on the other hand registered faster declines in manufacturing conditions. In Britain, outside the European Union, the manufacturing sector showed some signs of turning a corner in its long slump. 'That said, any hoped for stabilization remains fragile and subject to potential headwinds that could severely impact demand, supply chain reliability and future growth prospects,' said Rob Dobson, director at S&P Global Market Intelligence. Speaking at the start of a central bankers' annual get-together in Sintra, Portugal, European Central Bank President Christine Lagarde said the global environment had changed fundamentally since the inflation spurt of the pandemic years. 'The world ahead is more uncertain – and that uncertainty is likely to make inflation more volatile,' Lagarde said. Data on Tuesday showed euro zone inflation last month stood at the ECB's 2% target, confirming that the era of runaway prices is over. – Reuters
