June marked the third consecutive month that production levels increased for manufacturers in China, according to brokerage firm CLSA. It was also the third consecutive month that order books improved, after a period of contraction that lasted eight months, CLSA stated.
While a majority of the firms reporting a rise in production cited increased client confidence and new product developments as reason for the increase. According to CLSA, "June data indicated that foreign orders rose for the first time in eleven months. However, the expansion was only marginal, providing evidence to suggest that demand from domestic sources was the primary driver of total new business growth."
In addition, the data signaled that the rise in production was insufficient to prevent a further increase in backlogs, CLSA pointed out.
Employment in the manufacturing sector in China also rose in June, but only marginally. And prices charged by manufacturing firms fell for the tenth successive month, although the latest decline was the least marked in that sequence, CLSA noted.
