China’s manufacturing outlook still weak but showing ‘signs of recovery’, Caixin survey shows

Caixin/Markit manufacturing purchasing managers’ Index (PMI) improved to 49.9 in July from 49.4 in June

Official purchasing managers’ index also rose slightly to 49.7 in July from 49.4 in both May and June, but both surveys remain negative on China’s manufacturing

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The Caixin/Markit manufacturing purchasing managers’ Index (PMI), a gauge of sentiment among the country’s factory operators which tends to include more small private sector firms, improved from 49.4 in June to 49.9 in July. Photo: AFP

Published: 10:56am, 1 Aug 2019Updated: 10:25pm, 1 Aug 2019

China’s manufacturing sector continued to contract in July, although at a slower pace than in previous months due to “signs of recovery”, a private survey released on Thursday showed.

The Caixin/Markit manufacturing purchasing managers’ Index (PMI), a gauge of sentiment among the country’s factory operators which tends to include smaller private sector firms, improved from 49.4 in June to 49.9 in July.

It follows Wednesday’s release of the official manufacturing purchasing managers’ index which also rose slightly to 49.7 in July from 49.4 in both May and June, the National Bureau of Statistics said. The official gauge covers larger and state-owned firms.

A reading of 50.0 divides expansion from contraction, meaning the higher above 50.0 the faster the expansion, while the further below 50.0, the greater the contraction.

“China’s manufacturing economy showed signs of recovery in July,” said Zhong Zhengsheng, director of macroeconomic analysis with consultancy CEBM Group, a subsidiary of Caixin Insight Group.