China July Manufacturing PMI
CEIC Gallery/Emerging Economies - August 8, 2016 Summary China released official manufacturing PMI data for July. According to the NBS, the index fell by 0.1ppt to 49.9 from 50 in June, mainly dragged by 1) El Nino brought strong rainfall all over China, especially for middle and lower Yangtze River, which left a significant impact on local production and transportation; 2) continuous weak market demand reflected by further slowed-down growth in fixed asset investment and private fixed asset investment. Chart 1 & 2
- Chart 1: China's manufacturing PMI fell by 0.1ppt to 49.9 in July, which indicated a contraction in the nation's factory activity for the fist time in five months. A PMI reading above 50 indicates an expansion in manufacturing activity, while a reading below 50 points to a contraction.
- Chart 2: Both medium and small enterprises saw two-month consecutive decline in PMI to 48.9 and 46.9, respectively. In contrast, large companies in China maintained a PMI above 50, namely, 51.2 (0.2 ppt higher than last month).
- Chart 3.1: Among five sub-indexes, New Order, Production and Supplier's Delivery Time maintained above 50. Nonetheless, PMI for new order and production slightly dropped by 0.4ppt and 0.1ppt to 52.1 and 50.4, respectively, indicating slowing-down market supply and demand. However, a PMI of 50.5 for Suppliers' Delivery Time demonstrates improving efficiency.
- Chart 3.2: Contracting cost was another readable sign from July's Employment and Raw Material Inventory indexes. Both were below 50, namely, 48.2 and 47.3, respectively. Nonetheless, declines narrowed down by a rise of 0.3ppt for both indexes, compared to last month.
- Chart 4.1: China's fixed asset investment for the first six months grew 9% YoY to Rmb25.8trn while YTD YoY growth for the fist five months was 9.6%.
- Chart 4.2: Private fixed asset investment further slowed down by 1.1ppt to 2.8% YoY, namely, Rmb15.9trn for the first six months.