In China, manufacturing activity experienced a contraction in July for the first time in nine months due to a decrease in new orders, as per a private sector survey released on Thursday.
The Caixin/S&P Global manufacturing PMI dropped to 49.8 in July from 51.8 in the previous month, marking its lowest level since October last year and falling short of analysts’ expectations of 51.5.
The survey, which primarily focuses on smaller export-oriented companies, aligns with an official PMI survey from Wednesday indicating a decline in manufacturing activity to a five-month low.
The sluggish growth in manufacturing output, the slowest in nine months, was attributed to the first decline in new orders in a year, with subdued demand and reductions in client budgets cited as contributing factors.
In an effort to stimulate consumption, China announced plans to allocate around 150 billion yuan ($20.74 billion) from a 1 trillion yuan issuance of ultra-long special treasury bonds to incentivize the replacement of old appliances, cars, electric bicycles, and other goods.
Despite the overall downturn in new orders, export orders continued to rise in July, albeit at a slightly slower pace compared to June.
The manufacturing data reveals challenges facing China’s economic growth trajectory in the second half of 2024, highlighting the need for measures to bolster domestic demand and sustain export growth.
