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China’s manufacturing activity fell slightly last month, figures show

Seasonal factors and extreme weather contributed to a downturn in the Purchasing Managers’ Index, according to the National Bureau of Statistics
  • Nevertheless, some sectors including aerospace, shipbuilding and electronic equipment still managed year-on-year expansion in July

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China’s manufacturing activity shrank slightly in July, with the country’s official manufacturing purchasing managers’ index (PMI) falling to 49.3 from 49.7 in June, according to the National Bureau of Statistics (NBS) and reports in multiple national media outlets.

The index, which reflects manufacturing sentiment, remains below the 50-point mark, indicating that factory activity contracted. The new figure comes amid Washington’s ongoing trade war on China and Sino-EU trade tensions.

NBS statistician Zhao Qinghe added that the fall was largely expected as the manufacturing industry entered its traditional low season, with extreme weather events including heat waves and torrential rains making the situation slightly worse. 

Zhao noted that despite an overall contraction, a number of sub-indexes were growing. The PMIs for high-tech manufacturing and equipment manufacturing were 50.6 and 50.3, respectively – with industries such as aerospace, shipbuilding and electronic equipment supported by an uptick in both production and new orders.

[See more: China’s economy grew 5.2 percent year-on-year in the second quarter]

In the non-manufacturing sector, the PMI edged down to 50.1 from 50.5 the previous month. Services saw a mixed performance across industries. 

The construction sub-index meanwhile declined from 52.8 to 50.6, reflecting slower activity due to turbulent weather. Transport, postal services, and entertainment reported business activity indices above 60, boosted by summer holiday demand. Sectors such as real estate and residential services remained below the critical threshold. 

China’s composite PMI, which combines both manufacturing and non-manufacturing data, came in at 50.2 for July – slightly lower than June but still indicating overall economic expansion. 

Data released on Sunday showed manufacturing profits grew by 1.4 percent year-on-year in June – in contrast to the 4.1-percent decline recorded in May.

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