China's biz sentiment softens, but stays strong in June: S&P Global

The S&P Global China business activity net balance fell from a ten-year high of 34 per cent in February to 23 per cent in June, signalling a softer degree of optimism regarding future output.

The reading was the second-highest since February last year.

This was despite the overall level of positive sentiment softening from the decade-high recorded in February.

Expectations around job creation, profitability, capital expenditure and research & development (R&D) spending also moderated in June, but remained positive overall.

At the same time, inflationary pressures are forecast to subside, with firms anticipating softer rises in both input costs and selling prices, S&P Global said in a release.

Manufacturers in China signalled a more marked weakening in confidence than service providers. Notably, the net balance of goods producers forecasting higher output dipped from 30 per cent to 14 per cent.

Firms in China expect further improvements in customer numbers and demand as the economy continues to recover from the impact of the pandemic.

However, some companies expressed concerns over relatively sluggish market conditions at home and overseas, rising costs, exchange rate fluctuations, squeezed customer budgets and tough market competition.

Chinese companies foresee profitability growth in the coming year, though the overall level of sentiment softened from February.

ALCHEMPro News Desk (DS)