China PMIs: messages in the sub-indices signalling that full recovery will take some time

The headline is from ING's take on today's POMIC data from China.

ICYMI, the data is here:

• China June Manufacturing PMI 50.2 (expected 50.5) Non-manufacturing 54.7 (expected 52.5)

• China June PMIs solid, but "Soft market demand is still the main problem ... " (NBS)

ING remarks (in brief):

• The rebound of the non-manufacturing PMI to 54.7 in June from 47.8 in May was mainly due to more construction activity (the PMI for which was 56.6, up from 52.2 in May), This indicates the resumption of infrastructure construction and some state-backed real estate developers also resuming home and office building.
• The employment sub-index showed further decreases in workers in both PMI series. This will continue to put pressure on retail sales and selling prices.
• The selling price sub-index in both non-manufacturing and manufacturing PMIs, from which we can infer demand for both goods and services, remained weak, even though lockdowns were more localised in June.
• There could be a further squeeze on profit margins as costs are now edging up while selling prices are falling.