China’s factory activity contracted for 4th straight month in July, though at slower pace

 

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China’s factory activity contracted for the fourth straight month in July, with the official manufacturing Purchasing Managers’ Index (PMI) coming in at 49.3, according to data released by the National Bureau of Statistics on Monday.

That’s compared to 49.2 expected by analysts and improving slightly from a reading of 49 in the previous month. 

In breakdown, the sub-indexes for production and suppliers’ delivery time was above the 50 mark that separate expansion and contraction, while the sub-indexes for new orders, raw material inventory and employment were in contractionary territory, according to the NBS.

The sub-index for production was 50.2 in July, remaining in expansion, but falling by 0.1 percentage points from June, while the sub-index for new orders was 49.5, staying in contraction, but picking up by 0.9 percentage points from the previous month.

The sub-index for new export orders contracted at a faster pace, falling by 0.1 percentage point to 46.3, remaining in the contractionary territory for the fourth straight months, while that for imports fell by 0.2 percentage point to 46.8.

Employment in the manufacturing sector weakened further in July, with the sub-index falling by 0.1 percentage point to 48.1, remaining in contraction for the fifth consecutive month.

Raw material cost increased in July, driving higher the price level in the manufacturing sector. The sub-indexes for raw material purchasing prices and product factory-gate prices reached 52.4 and 48.6, respectively, rising by 7.4 percentage points and by 4.7 percentage points from the previous month.

The sub-index for suppliers’ delivery time reached 50.5 in July, rising by 0.1 percentage point from June, indicating relatively stable logistics and supply chain situation.