China Logistics Index Hits 50.6% in June, Signaling Recovery

China’s logistics sector expanded for a second consecutive month in June 2026, with the Logistics Prosperity Index (LPI) rising to 50.6%, up 0.3 percentage points from May, according to data released by the China Federation of Logistics and Purchasing (CFLP). The reading, which remains above the 50% boom-bust threshold, provides fresh evidence that the world’s second-largest economy is building on its recovery momentum as mid-year approaches.

What the Index Measures

The LPI is a composite indicator tracking the health of China’s logistics sector across 12 sub-indices, including business volume, new orders, employment, inventory, and costs. A reading above 50% signals expansion, while below 50% indicates contraction. The index has been tracked monthly by the CFLP since December 2011, with a long-term median of 53.5%. The current reading remains well above the record low of 26.2% recorded in February 2020 during the COVID-19 pandemic, though below the all-time high of 59.5% set in March 2012, as reported by CEIC Data.

Key Sub-Indices Show Broad Improvement

Nine of the 12 sub-indices remained above the expansion line in June. The Business Volume Index reached 50.6%, up 0.3 percentage points month-on-month, while the New Orders Index rose to 50.3%, marking its fourth consecutive monthly increase. The Warehousing Index also returned to expansion territory at 50.2%, climbing 0.6 percentage points from May.

According to People’s Daily, operational efficiency metrics showed notable gains. The Equipment Utilization Rate Index rose 0.2 percentage points, the Capital Turnover Rate Index improved by 0.1 points, and the Inventory Turnover Index increased by 0.2 points, reflecting what analysts describe as strengthening enterprise resilience.

“The logistics business volume index and new orders index have risen continuously, with balanced development across regions, a consolidated recovery foundation, and stable employment positions, logistics infrastructure, and market expectations,” said Liu Yuhang, Director of the China Logistics Information Center, as quoted by People’s Daily. “Despite significant cost pressures, the endogenous动力 of micro-level operations is strengthening, and the ability to cope with demand fluctuations is steadily improving.”

Drivers of the Recovery

The June rebound was underpinned by several factors. Yang Biao, Deputy General Manager of China Storage and Development Co., noted that the concentrated commencement of major national infrastructure projects and the synchronous recovery of manufacturing supply and demand drove the warehousing sector back into expansion. Manufacturing logistics demand showed particular strength in electronic and mechanical equipment, telecommunications equipment, transportation equipment, and energy-saving home appliance manufacturing.

Consumer-related logistics demand also remained stable, with holiday spending boosting wholesale trade, retail chains, and supermarket activity. E-commerce continued to show resilience, though the research noted some divergence between platform-based and live-streaming channels.

Cost Pressures Remain a Challenge

Despite the positive headline figure, operating costs continue to weigh on the sector. The Main Business Cost Index remained above 52%, with fuel costs easing only modestly from elevated levels. Hu Han, an analyst at the China Logistics Information Center, cautioned that attention must be paid to logistics enterprises’ taxes, labor, depreciation, and policy-related equipment conversion costs.

Local governments have responded with targeted measures. Anhui Province introduced differentiated highway tolls with a 15% discount for ETC-equipped trucks on certain routes. Zhejiang implemented preferential electricity pricing for small and micro enterprises, while Hebei accelerated the construction of 44 county-level express delivery logistics centers.

Forward Outlook

Looking ahead, the Business Expectation Index held steady at 55.9%, indicating that logistics companies remain confident about future demand. The Fixed Asset Investment Index rose to 54.3%, suggesting continued investment in capacity expansion.

Li Yansen, Chief Macroeconomic Analyst at Founder CIFCO Futures Research Institute, offered an optimistic view: “Since the beginning of the year, China’s economic operation has improved significantly and transformation and upgrading have accelerated. It is expected that in the second half of the year, the global economic fundamentals will continue to improve, demand expectations will improve coupled with technological progress, and commodities are expected to remain strong.”

Guo Chunli, Vice President of the Chinese Academy of Macroeconomic Research, added that a virtuous cycle is emerging where new demand leads new supply and new supply creates new demand, supported by the integration of consumer upgrading with modern technology.

As China continues to implement its “Six Networks” infrastructure plan, with logistics network development as a key component, the foundation for sustained sector growth appears to be strengthening. However, persistent cost pressures and global economic uncertainties will test the resilience of the recovery in the months ahead.