China: Manufacturing growth slows in July

Chinese factory output grew at a slower pace in July, according to a private survey, as the country’s strict coronavirus restrictions eased, or were confined to less economically important areas in the country, lessening the economic impact.

Caixin’s manufacturing PMI fell to 50.4 points in July from 51.7 points in June, according to data from Caixin and S&P Global.

The data points in a different direction from the official counterparts released on Sunday, which showed a drop to 49 points from June’s rise of more than 50 points.

Despite the continued growth reflected in Caixin data, sub-indices measuring factory output and export orders softened in July as demand was relatively subdued, as observed by companies surveyed.

Meanwhile, the employment index posted its biggest drop since April 2020 and fell for the fourth month in a row.

“The recovery in supply and demand has failed to spill over into the manufacturing labor market,” a Caixin economist said.

“The manufacturing sector improved for the second consecutive month in July, although the base remained weak,” Wang added.

He said the worst of the lockdowns had passed, and the third quarter would be a critical period to get the economy back on track.