The latest data from the National Bureau of Statistics has revealed that China's official manufacturing purchasing managers' index (PMI) improved slightly in July, but still indicated contraction for the fourth consecutive month. The PMI rose to 49.3 from 49.0 in June. However, any reading below 50 signifies a contraction in activity.
This result exceeded the forecast of 49.0 by a Wall Street Journal poll of economists, suggesting a more positive picture than anticipated. Nevertheless, the production subindex dropped to 50.2 from 50.3 in June. The index for total new orders showed a modest increase to 49.5 in July from 48.6 in June, while new export orders declined to 46.3 from 46.4.
In addition to manufacturing, China's nonmanufacturing PMI, which encompasses both the service sector and construction activity, also experienced a decline. The nonmanufacturing PMI fell to 51.5 in July from 53.2 in June. The subindex tracking service activity decreased to 51.5 in July from 52.8 in the previous month, and the construction subindex fell to 51.2 from 55.7.
These numbers indicate continued weakness in the world's second-largest economy and highlight the challenges faced by various sectors in China. While the slight improvement in the manufacturing PMI is a positive sign, it is essential to closely monitor future data to assess whether this trend will continue or if further stimulus measures are required to support economic growth.