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AlwaysFree: China’s July Manufacturing Activity Grows At Slowest Rate In 17 Months: Official PMI

Author: SSESSMENTS

China’s manufacturing activity grew at the slowest rate since February 2020, weighed down by high raw material costs and extreme weather, according to a survey of Purchasing Managers’ Index (PMI) by the National Bureau of Statistics (NBS). China’s manufacturing PMI reading stood at 50.4 in July, slowing from 50.9 in June. However, it was above the 50-point threshold, indicating growth in the sector. The reading is below analysts’ expectation of a slight slowdown to 50.8. It also marks the lowest figure since the index plummeting to 35.7 in February 2020 due to the COVID-19 pandemic.

The sub-index for factory production dropped from 51.9 in June to 51.0 in July, reflecting reduced production due to maintenance and extreme weather. Meanwhile, the new order sub-index slipped from 51.5 to 50.9, pointing to a slowdown in demand. The sub-index for new export orders has fallen for three consecutive months to 47.7 in July.

A sub-index for raw material costs increased from 61.2 in June to 62.9 in July amid soaring global commodity prices. High raw material costs have squeezed industrial firms’ profitability and deterred exporters from taking on orders. Meanwhile, the construction index fell from 60.1 to 57.5 due to extreme weather, and analysts expect the sector to face headwinds amid the government’s clampdown on the property market.

China’s economy has largely recovered from the pandemic, with the consumer demand and service sectors gradually catching up to the gains in manufacturing and exports. However, new COVID-19 outbreaks pose new concerns among Chinese manufacturers. The official non-manufacturing PMI dropped from 53.5 in June to 53.3 in July, a separate NBS survey showed.

Tags: All Products,AlwaysFree,Asia Pacific,China,English,NEA

Published on August 2, 2021 2:43 PM (GMT+8)
Last Updated on August 2, 2021 2:43 PM (GMT+8)