China's official manufacturing PMI fell to 49.2 in July, reversing June's brief expansion.
Why it matters: The weaker reading points to softer factory demand that can hit industrial metals, exporters and China-exposed equities. It also adds pressure on policymakers as domestic demand and trade remain uneven.
- China's official manufacturing PMI fell to 49.2 in July from 50.3 in June.
- The July reading marked the first contraction in five months, AP reported.
- New orders dropped to 48.5 from 51.2, while production slipped to 49.9 from 51.4.
- China's National Bureau of Statistics released the July data on July 31.
China's factory activity slipped back into contraction in July, with the official manufacturing PMI falling to 49.2 after June briefly returned to expansion. The National Bureau of Statistics released the July reading on July 31, according to the Associated Press.
The result marked the first contraction in five months and came in below economists' expectations, AP reported. Lynn Song, chief economist for Greater China at ING Bank, called it "an unpromising start to the first wave of economic data for the second half of the year."
The weakness was broad across the survey. New orders fell to 48.5 in July from 51.2 in June, while production slipped to 49.9 from 51.4, AP reported. Capital Economics said weakness in domestic goods demand, including building activity, helped drag down the figures.
Reuters reported on June 30 that the official PMI had returned to expansion in June after the National Bureau of Statistics put that reading at 50.3, highlighting how quickly conditions weakened by the end of July.
By the numbers
- 49.2 - China's official manufacturing PMI in July, down from 50.3 in June.
- 48.5 - July new orders, versus 51.2 in June.
- 49.9 - July production, versus 51.4 in June.
What's next: China's next monthly official economic data will show whether July's factory weakness carries into August.