China’s July factory PMI falls to 49.2 as orders shrink
Why it matters: The weak reading adds pressure on Beijing to roll out more stimulus after second-quarter growth slowed to 4.3%.
China’s factory activity slipped back into contraction in July, with the official manufacturing purchasing managers’ index falling to 49.2 from 50.3 in June as new orders weakened and typhoons disrupted some production. The reading was below economists’ forecast of 50 and marked the first contraction since February. Demand was a key drag: the new orders subindex dropped to 48.5, while new export orders also fell below 50. Weakness spread beyond factories, with the non-manufacturing PMI at 49.0 and the composite PMI at 49.3. The data landed a day after the Politburo pledged to use existing support measures and add policies in a timely way as the economy faces mounting pressure. China’s second-quarter GDP grew 4.3%, below the official full-year target range of 4.5% to 5%.