Manufacturing activity in China eases in July

After rebounding in June, official manufacturing PMI declined again in July, falling to 49. Caixin manufacturing PMI also eased, to 50.4 from 51.7 in June, but is still above the threshold value of 50 signifying expansion.

China’s official manufacturing PMI, published by China’s NBS, fell once again into negative territory, after rebounding slightly in June. The index dropped to 49 from 50.2 in the previous month as four out of the five components fell below the threshold level of 50. The only exception was the supplier’s delivery times which eased to 50.1.

The production, new orders, raw inventory, and employment subindices all declined. Demand subindices experienced a pronounced decline with backlog orders dropping to 42.6, the lowest reading since February 2020. In terms of enterprise type, all subindices fell below 50, with the sharpest decline observed in the subindex for medium enterprises – 48.5 in July from 51.3 in the previous month.

The Caixin manufacturing PMI, published by S&P Global, eased in July, decelerating to 50.4 from 51.7 in the previous month. Among the main subindices, stocks of purchases accelerated compared to the previous month, while output and new orders eased but remained above 50. Suppliers’ delivery times and employment subindices declined in July. 

Although not confirmed officially, economists believe that the official PMI focuses more on state-owned enterprises (SOEs) nationwide, while the Caixin PMI focuses on small and medium-sized export-driven private enterprises in China's coastal area.

More about China's official and Caixin PMI here.

Read more in the quarterly report China Economy in a Snapshot - Q3 2022.