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Workers sewing at a clothing factory in Bozhou, Anhui Province, East China.
STR | AFP | Getty Images
Manufacturing activity in China contracted in July, according to the results of a private investigation released Thursday.
The Caixin / Markit Factory Purchasing Managers Index was 49.9 in July – a little better than expected, but still in a contractionary context.
Analysts polled by Reuters were expecting the indicator to reach 49.6. The June reading was 49.4.
PMI values above 50 indicate expansion, while those below this signal contraction.
Zhengsheng Zhong, director of macroeconomic badysis at CEBM Group, a subsidiary of Caixin, wrote: The new orders and production sub-indexes have returned to the expanding territory, while the gauge for new orders to the export has increased slightly, even if it was still in contraction.
In particular, the measurement of future output rose in July, indicating that business confidence has increased, he added.
"The Chinese manufacturing economy has shown signs of recovery in July," said Zhong. "Business confidence has rebounded, reflecting the strong resilience of the economy, policies such as reduced taxes and royalties to support the economy have had an effect," he said. .
On Wednesday, data from the China Bureau of Statistics showed that the official manufacturing PMI was in contraction for three consecutive months, reaching 49.6 for the month of July.
The official PMI survey usually polls a large portion of large companies and public companies. The Caixin indicator presents a wider range of small and medium businesses.
The PMI is a survey of companies on the operating environment. These data provide a first glimpse of what is happening in an economy, as they are usually among the top economic indicators published each month.
For China, the PMI is one of the economic indicators that investors around the world are watching closely for signs of difficulties related to domestic headwinds and the ongoing trade dispute between the United States and China.
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