New official figures show a mild downturn in the industrial sector, though pockets of high-tech manufacturing remain resilient.
China’s factory activity experiences July contraction
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The latest official data indicates that China’s factory activity contracted in July, breaking a four-month streak at or above the 50-point expansion threshold. The purchasing managers’ index (PMI) for the sector fell to 49.2, down from 50.3 in June, falling below the line that distinguishes expansion from contraction, China Daily reports.
According to the National Bureau of Statistics, the decline in China’s factory activity was driven by a drop in production subindices, which fell to 49.9 from 51.4, and new orders, which slipped to 48.5 from 51.2. Huo Lihui, an NBS statistician, cited a high comparison base following recent rapid growth and seasonal industry slowdowns as primary factors for the dip.
China’s factory activity: sectors of resilience
Despite the broader slowdown in China’s factory activity, specific segments continue to demonstrate strength.
High-tech manufacturing maintained a PMI of 53.3, while equipment manufacturing stood at 51.4, both indicating continued expansion. Furthermore, manufacturer expectations for future production and business operations remain positive, with the subindex holding steady at 54.1.
[See more: China’s fiscal revenue is growing at a faster pace]
The wider economic cooling also impacted non-manufacturing sectors, with the PMI for services and construction falling to 49.0 in July, down from 50.2 in June. Consequently, the national composite PMI, which tracks output across all sectors, declined to 49.3 from 50.6.
