China Lockdowns Impacted on 38% of Companies in June, Compared with 49% a Month Earlier

The First Data on Economic Activity Levels in China - Every Month
The only survey with current month, month-on-month, monthly year-on-year, and forward looking questions
Updated: June 22, 2022

The June Sales Managers Index continues to illustrate the heavy toll being taken on the Chinese economy by continuing Government attempts at preventing the spread of Covid.

Life is gradually returning to many areas, but the impact, even in areas not locked down, has been severe, and continues to cause difficulties for many companies.

Manufacturing and Service sectors continue to contract in June

Market Growth Index: Manufacturing (Blue) & Services (Red)
Source: World Economics
Note: Data Shown as a Diffusion Index. (50 = 'No Change', above 50 = Increasing growth, below 50 = Declining growth)

Manufacturing has been particularly badly affected with factories unable to operate entirely closed off from supply chains. The Manufacturing Market Growth Index came in close to a 25 month low in June, with a reading of 46.4.

Business Confidence in the Manufacturing sector registered a 28 month low in June, and the Staffing Levels Index and overall Manufacturing Sales Managers Indexes also registered sub 50 levels, indicating continuing recession in activity.

The low level recorded by the Staffing Levels Index is particularly significant as the Index records year on year growth (or decline in this instance), as opposed to month-on-month changes.

Jobs layoffs continue in China

Staffing Levels Index: Manufacturing (Blue) & Services (Red)
Source: World Economics
Note: Data Shown as a Diffusion Index. (50 = 'No Change', above 50 = Increasing growth, below 50 = Declining growth)

The Services sector did a little better, with Business Confidence back into the >50 positive growth zone. However the more general Services Market Growth Index stayed low with a reading of 46.8 indicating further contraction in service sectors throughout China.

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About the Sales Managers Indexes

The Sales Managers' Indexes provide the earliest monthly data on the speed and direction of economic activity in key growth areas of the world.

The SMI’s (Sales Managers’ Indexes) are compiled and analysed by World Economics and are based on survey data collected from a panel of companies stratifying all Industry Classification Board (ICB) sectors which are weighted to reflect their contribution to national Gross Domestic Product.

Key advantages of the SMI's:

• The SMI's provide the first indication each month of the speed and direction of economic growth.
• The SMI's provide the most complete indication of growth, covering all private sector activity.
• The SMI's are based on a key occupational group - sales executives - uniquely able to sense accurate changes in business activity levels.
• The SMI survey base - salespeople - are used by virtually all businesses, including in frontier markets, unlike other occupational groups.
• The SMI's focus on the key countries contributing to over 60% of China growth in recent years.