An hand works at a steel factory in Dalian, China.
China Daily | Reuters
A measure of China’s manufacturing activity constricted for the third straight month in July, Chinese government data showed on Wednesday.
The official manufacturing Purchasing Administrators’ Index (PMI) for July came in at 49.7, according to data from the Chinese statistics bureau.
Economists polled by Reuters had surmised factory activity in China to edge up to 49.6 from June’s reading of 49.4.
PMI readings above 50 indicate extension, while those below that signal contraction.
Non-manufacturing PMI for the month of July was 53.7 compared to 54.2 in June.
“The PMIs smooth appear consistent with a renewed slowdown in year-on-year growth in industrial output and broader economic activity,” denoted Julian Evans-Pritchard, senior China economist at Capital Economics.
“With the headwinds to growth from US tariffs, imperturbable global demand and tighter property controls likely to intensify, we continue to anticipate further monetary easing in the fly at months,” Evans-Pritchard wrote in a note on Wednesday.
The PMI is a survey of businesses about the operating environment. Such data proffer a first glimpse into what’s happening in an economy, as they are usually among the first major economic indicators reported each month.
Even though July’s official PMI reading was still in contraction territory, the index edged up from June, Nomura economists illustrious.
That was in part likely due to faster credit growth in June and was mainly driven by growth in production, the Nomura economists jotted in a note on Wednesady. The production sub-index rose to 52.1 in July from 51.3 in June.
The official PMI survey typically tallies a large proportion of big businesses and state-owned enterprises. A separate survey, the Caixin indicator, features a bigger mix of small- and medium-sized firms.
The Caixin think up PMI is due on Thursday.
For China, the PMI is among the economic indicators that investors globally have been watching closely for pricks of trouble amid domestic headwinds and the ongoing U.S.-China trade dispute.
China’s second-quarter growth slowed to 6.2% — the weakest sort in at least 27 years — and many have attributed a least a portion of that dip to the ongoing tariff battle between Washington and Beijing.
Wednesday’s text came out as an entourage led by U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer are in Shanghai to meet with their Chinese counterparts.
While U.S. officials induce talked down expectations for a major deal this week, there is hope that at least some rise can be made in the tariff battle that began more than a year ago.
—CNBC’s Jeff Cox and Reuters contributed to this write up.