China’s manufacturing Purchasing Managers’ Index (PMI) during the month of July contracted for the first time in five months, indicating a slowdown in the world’s second-largest economy’s factory activity.
China’s manufacturing PMI index fell to 49.9 in July from 50.0 a month ago, pointing to a slowing of growth momentum in the world's second-largest economy, data released by the China Logistics Information Center showed Monday. A PMI reading above 50 indicates an expansion in manufacturing activity, while a reading below 50 points to a contraction.
Moreover, the sub-index measuring new orders dropped to 50.4 from 50.5 in June, while the production sub-index decreased to 52.1 from 52.5. China's official nonmanufacturing PMI, also released Monday, rose to 53.9 in July from 53.7 in June, data showed. A Reuters poll had predicted a reading of 50.0.
The divergence between the two PMI readings reflected flooding in certain parts of China that affected the near-term domestic production of large enterprises, while an upturn in the tech cycle helped export-oriented private sector enterprises, reports said.
Separately, Caixin's China July manufacturing PMI, which tracks smaller-scale private firms compared to the official gauge, rose above the key 50 level for the first time since February 2015. The index reported a 50.6 reading for July, compared with 48.6 in June.
Meanwhile, the Chinese economy reported a growth in gross domestic product by about 6.7 percent y/y in the three months ended June.
