Dow Jones Newswire
A private gauge of China’s manufacturing activity in July fell to a post-COVID-19 low as heavy floods, a resurgence in COVID cases and power shortages in some cities weighed on output and new orders.
The Caixin China purchasing managers index dropped to 50.3 in July from 51.3 in June, Caixin Media Co. and researcher Markit said Monday. July’s reading was the lowest in the past 16 months, but still held above the 50 mark that separates expansion from contraction.
The result points in the same direction as a competing official gauge that tracks large state factories more closely. The reading for July was 50.4 versus 50.9 in June, China’s statistics bureau said Saturday. The official survey of manufacturers has a much larger sample than the Caixin survey.
Caixin PMI’s subindex for new export orders rose only slightly as the pandemic continued to hinder sales overseas, Caixin said. The rate of output growth also softened for the third month in a row, increasing only marginally and at the slowest pace in 16 months.
The subindex measuring employment remained stable and stayed just above the 50-mark in July, marking the fourth straight month of expansion, said Wang Zhe, a senior economist at Caixin Insight Group.
Wang said prices of raw materials remained high but that inflationary pressure eased slightly.
“The recovery of the economy is not yet solid,” he said. “The economy is still facing huge downward pressure.”