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Staff of Reuters 3 Minutes to Read BEIJING, China (Reuters) – According to a private poll released on Thursday, China’s factory activity grew at a slower pace in June, as the reappearance of COVID-19 cases in the export province of Guangdong and supply chain problems pushed output growth to its lowest level in 15 months. PHOTO FROM THE FILE: On May 17, 2020, a person works on a production line in Huzhou, Zhejiang Province, China, making steel constructions. REUTERS/China Daily/File Photo Last month, the Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) dipped to 51.3 from May’s 52, representing the 14th consecutive month of increase, but it fell short of expert estimates for a modest slowdown to 51.8. The lower results in the private survey, which largely covered export-oriented and small industries, are in line with official data showing industrial growth slowed to a four-month low due to production drag. In June, the output sub-index fell to 51.0, the lowest level since March 2020, when the industrial sector began to recover from COVID-induced paralysis. New order growth also slowed to a three-month low. Rising COVID-19 cases around the world, particularly of the more contagious Delta type, put a toll on demand, which hardly rose compared to a substantial expansion the previous month. Since the recent wave of cases in late May, more than 150 new coronavirus infections have been reported in Guangdong province, a manufacturing and exporting hub in southern China, causing local governments to step up preventative and control measures, limiting port processing capacity. The private poll, on the other hand, found that businesses increased payrolls at the fastest rate in seven months, as they cranked up attempts to enhance capacity in the months ahead amid improved client demand. Input costs rose at the weakest rate since November last year, easing inflationary pressures. “The industrial sector has steadily returned to normal,” said Wang Zhe, Caixin Insight Group’s senior economist. “The low base effect from last year will wane in the second half of this year. Inflationary pressure, combined with the slowing economy, remains a major challenge for China.” Stella Qiu and Ryan Woo contributed reporting, while Shri Navaratnam edited the piece./nRead More

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