By Gina Lee
Investing.com – A private business survey reported that factory activity expanded at the fastest pace in nearly ten years in July, but exports and employment remain weak as the COVID-19 virus continues its rampage globally.
The Caixin Manufacturing Purchasing Managers' Index (PMI) rose to 52.8 last month from June's 51.2, beating analyst forecasts of a 51.3 reading prepared by Investing.com. The figures indicted a third consecutive month of expansion, and the biggest increase since January 2011.
The figures come on the back of the National Bureau of Statistics reporting an official manufacturing Purchasing Manager’s Index (PMI) of 51.1 on Friday. Both readings stayed firmly above the 50-threshold separating expansion from contraction.
The two readings were positive indications of the world’s second largest economy’s recovery from COVID-19's impact.
"The supply and demand sides both improved, with relevant indicators maintaining strong momentum," Wang Zhe, senior economist at Caixin Insight Group, said in a note accompanying the survey.
But he warned, “we still need to pay attention to the weakness in both employment and overseas demand.”
But the survey also showed that export demand remains weak many manufacturers, both big and small, facing reduced or falling order. The re-imposition of lockdown measures in some countries also continue to dampen overseas demand.
Dampened demand has also led factories to cut payrolls for a seventh consecutive month to reduce costs. But avoiding mass unemployment has been a top governmental priority, with the government pledging continuous support for the economy in the second half of the year on Thursday.