A new report on China’s Manufacturing PMI was released, here the highlights:
July data signalled that the downturn in China’s manufacturing sector intensified at the start of the third quarter. Renewed falls in both total new work and new export orders led manufacturers to cut production at the fastest rate since November 2011. Softer client demand and reduced output requirements contributed to further job shedding and lower purchasing activity, with the latter declining at the sharpest rate since January 2012. Meanwhile, deflationary pressures persisted, with both input costs and output charges declining in July and at faster rates than in the previous month. Adjusted for seasonal factors, the Purchasing Managers’ Index™ (PMI™) posted at 47.8 in July. This was down from 49.4 in June and below the neutral 50.0 mark for the fifth successive month.
Furthermore, the latest index reading signalled the sharpest deterioration in the health of the sector since July 2013. Following a slight improvement in June, total new business received by Chinese manufacturers fell in July. Furthermore, the rate of decline was the quickest seen since March 2014. Data signalled that both domestic and foreign demand had softened in the latest survey period, as highlighted by new export work also falling in July after a slight pick up in June. Weaker market conditions and an associated downturn in client demand contributed to a third successive monthly contraction of manufacturing production in July. Moreover, the latest reduction in output was the sharpest seen in 44 months.
Fewer new orders underpinned a renewed contraction of purchasing activity in China’s manufacturing during July. Furthermore, the rate of reduction was the sharpest seen since January 2012. Average input costs faced by Chinese manufacturing companies declined again in July. Furthermore, the rate of reduction accelerated to the sharpest seen since April.
Source: Markit Economics