(Bloomberg) -- The outlook for China’s manufacturing sector continued to deteriorate in June as weakness in the domestic economy combined with new tariffs the U.S. imposed the previous month on Chinese goods.
- The manufacturing purchasing managers’ index stayed at 49.4, according to data released by the National Bureau of Statistics on Sunday. That’s worse than the 49.5 forecast in a Bloomberg survey of economists. The non-manufacturing gauge was 54.2. A reading below 50 signals contraction.
- A sub-index gauging new export orders edged down further, highlighting the pressures the additional tariffs on $200 billion of goods impose on exporters
- The weak result indicates that the recovery in the first half waned, ahead of the truce reached this weekend in Osaka between the U.S. and China that prevents further tariff increases for now
- A collection of early data by Bloomberg showed the economy worsening in June, with poor small business confidence and weak trade
- “The trade tensions will likely weigh on China’s economic activities in June,” according to a note from Australia and New Zealand Banking Group economists led by Kanika Bhatnagar. High-frequency indicators indicate a slowdown and new orders may have dropped as well after the increase of tariffs in early May, they wrote ahead of the release.
--With assistance from James Mayger.
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