China PMI slips in June amid supply chain issues

Chinese manufacturing sector activity slipped to a three-month low in June, the results of a closely-followed survey revealed.

IHS Markit's China manufacturing sector Purchasing Managers' Index dipped from May's reading of 52.0 to 51.3 in June (consensus: 51.9).

According to the survey compiler, companies in the survey blamed higher Covid-19 infections and supply chain issues for the slower output growth.

A major port in Southern China was closed during the month, but it had since reopened, Freya Beamish at Pantheon Macroeconomics noted.

Total new business also expanded at a slower rate.

Nevertheless, firms took on more workers in response to persistent capacity pressures, although increased hiring was described as "marginal" it was the strongest pace since January 2013.

In parallel, input cost inflation was said to have eased "notably" in comparison to the prior month while remaining "sharp".

"The picture should improve going forward, as specific logistical problems are sorted out and the virus threat in the south recedes," Beamish said.

"More broadly, however, manufacturing will start to face headwinds."