China’s official purchasing managers’ index, issued by the China Federation of Logistics and Purchasing and the National Bureau of Statistics, fell to 51.2 in July from 52.1 in June, the third straight month of decline.
Yesterday’s PMI was the lowest since China’s manufacturing stopped contracting in March 2009. An output index fell to 52.7 from 55.8 in June. A measure of new orders slid to 50.9 from 52.1. An export-order index fell for a third month, dropping to 51.2 from 51.7.
Of 11 sub-indexes, only the measure of employment gained, climbing to 52.2 from 50.6.
On Monday, another gauge of manufacturing activity, the HSBC China Manufacturing Purchasing Managers’ Index, showed activity fell to 49.4 in July from 50.4 in June, indicating manufacturing activity actually contracted for the first time since China’s economic recovery began.
Those panellists that reported a decline in output often linked this to reduced intakes of new business, which fell for the second month in succession. Furthermore, the rate of decline in new work accelerated to the quickest since March 2009, with many panellists citing lacklustre client demand as having negatively impacted upon new order books. New export business also fell in July, contrasting with near-record rates of growth seen throughout Q1 2010.