China: Manufacturing PMI increases in July
The manufacturing Purchasing Managers’ Index (PMI) published by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP) increased to 49.7% in July from May’s 49.4%. The print narrowly exceeded the 49.6% result expected by market analysts. The index now sits just below the 50.0% threshold that separates contraction from expansion in the manufacturing sector.
The improvement in July was due to higher sub-indices for production, new orders and employment. As production lines became slightly busier in July, raw material inventories and supplier delivery times both fell. In terms of new orders, Iris Pang, ING’s China economist, saw two opposing trends, saying that “export related orders, including technology exports, e.g. semiconductors, have been falling due to the trade and technology war”, while, in contrast, “we expect that infrastructure-related orders will rise”.