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Explainer | China’s manufacturing, services data in July: 4 takeaways as pressure intensified, activity cooled
- Official manufacturing purchasing managers’ index remained in contraction for a fourth straight month, while Caixin/S&P Global gauge suffered first decline since April
- Official non-manufacturing PMI also fell in July, but in contrast, the Caixin/S&P Global gauge expanded for a seventh straight month
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1. Factory activity average falls to four-month low
China’s official manufacturing purchasing managers’ index (PMI) rose to 49.3 in July, up from 49 in June, but remained in contraction for a fourth straight month. The 50-mark separates growth from contraction on a monthly basis.
Within the official manufacturing PMI, the new-orders subindex rose to 49.5 in July from 48.6 in June, while the new-export-orders subindex fell to 46.3 from 47.2.
“July’s marginal improvement in the official manufacturing PMI was concentrated in production and raw material inventory,” said analysts at Nomura.
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“Overall, three of the five subindices that directly feed into the headline manufacturing PMI calculation edged up in July – except for production and employment – with only two staying in expansionary territory.”
In line with the official gauge, the Caixin/S&P Global manufacturing PMI fell to 49.2 in July from 50.5 in June, missing analysts’ forecasts of 50.3 and marking the first decline in activity since April.
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The average of the two gauges fell to a four-month low and is, according to analysts at Capital Economics, consistent with a further deterioration in factory activity last month.
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