National Business Daily (NBD), a Chinese national daily newspaper on business news, recently reported that, according to data just released by the Chinese National Bureau of Statistics, the July manufacturing purchasing managers index (PMI) was 49.4%, another decrease of 0.1 percent from June. Among the five sub-indexes that make up the manufacturing PMI, the production index (50.1%) is higher than the critical point of 50 percent, and the new order index (49.3%), raw material inventory index (47.8%), employment index (48.3%) and supplier delivery time index (49.3) are all lower than the critical point. It’s worth noting that the production index is 0.5% below last month’s number. Analysts expressed the belief that the manufacturing PMI remaining in the contraction range for three consecutive months was mainly due to the continued downturn in the real estate industry which directly inhibits demand for steel, cement and other building materials products.
Meanwhile, Caixin released its official Chinese Manufacturing PMI numbers for July. Caixin PMI is a well-respected economic indicator monitored globally by financial institutions. Caixin’s China Manufacturing PMI recorded 49.8 for July. Caixin’s report indicated that the prosperity of China’s manufacturing industry dropped significantly in July, with supply still outpacing demand. Domestic demand has been weak, the purchase volume sub-index has fallen below the critical point, and the raw material inventory sub-index has dropped accordingly. This is the first time for Caixin’s manufacturing PMI to drop below 50 since November 2023. Wang Zhe, Caixin’s senior economist, pointed out that, insufficient domestic effective demand and weak market optimism are still the most prominent problems at present.
Sources:
(1) NBD, July 31, 2024
https://www.nbd.com.cn/articles/2024-07-31/3486571.html
(2) Caixin, August 1, 2024
https://pmi.caixin.com/2024-08-01/102222126.html