BEIJING- China’s factory activity likely expanded in June for the first time in four months, driven by a faster recovery in production and an easing of supply chain snags as manufacturing hubs emerged from lockdowns, a Reuters poll showed on Wednesday.
The official manufacturing Purchasing Manager’s Index (PMI) is expected to rise to 50.5 in June – the highest in a year – from 49.6 the previous month, returning to expansionary territory for the first time since February, according to the median forecast of 30 economists polled by Reuters.
A reading above 50 indicates expansion from the previous month, below 50 means contraction.
An expansion of factory activity after three months of contraction adds to evidence that the world’s second-largest economy is charting a path out of the supply-side shocks from COVID-19 lockdowns and could ease downward pressure on the yuan, which has shed 5 percent against the U.S. dollar this year.
The key drivers would be an accelerated resumption of production amid easing COVID curbs and possibly higher demand for upstream production with stronger boost to infrastructure, analysts at Morgan Stanley said in a note. — Reuters
