China’s manufacturing sector lost some momentum in July as production and new orders expanded at a slower pace. However, overall factory activity remained in growth territory.
China Manufacturing PMI Falls in July
The RatingDog China General Manufacturing PMI declined to 50.9 in July from 51.7 in June.
The result came below market expectations of 51.9 and marked the weakest reading in four months.
Despite the decline, the index remained above the key 50-point level that separates expansion from contraction. This means China’s manufacturing sector has now expanded for eight consecutive months.
Production and New Orders Lose Momentum
The weaker PMI reading reflected slower growth in both factory output and new orders.
Both indicators fell to their lowest levels in four months after recording stronger growth in June.
Domestic demand continued to support manufacturers, but overall momentum eased following a solid performance during the second quarter.
Export Orders Return to Growth
One positive development came from international demand.
New export orders returned to expansion for the first time in three months, providing additional support to Chinese manufacturers.
The improvement suggests that overseas demand may be starting to recover, even as growth in the domestic market slows.
Factory Hiring Accelerates
Employment in China’s manufacturing sector increased for the second consecutive month.
The pace of job creation was the strongest since August 2023 as companies hired more workers to manage rising workloads.
The increase in employment may offer some support to the wider economy and household confidence.
Cost Pressures Ease
Input cost inflation slowed to a six-month low during July.
Lower cost pressures allowed manufacturers to keep their selling prices broadly unchanged after raising them for six consecutive months.
Overall, the latest data showed that China’s factory sector is still expanding, although growth has become more moderate compared with earlier in the year.
