Chinese manufacturing PMI falls unexpectedly

The Caixin China General Manufacturing PMI fell from 51.8 in June to 49.8 in July, falling below market expectations of 51.5.

As new orders declined following growth over the past 11 months due to sluggish demand conditions and cuts in customer budgets, this was the first decline in factory activity since October last year.

Also, purchasing levels declined for the first time since 2023/10, leading to a further decline in purchased inventory and an increase in finished products.

Employment remained relatively stable and declined only slightly.

Meanwhile, as orders from overseas decelerated, production volume grew at its lowest level in the past 9 months.

Also, the delivery date was extended for 2 consecutive months, and it was longer than in June.

On the price side, sales prices fell for the first time since May due to increased competition.

Meanwhile, input cost inflation fell to its lowest level in the past 4 months.

Finally, sentiment improved from a 5-year low in June, supported by business development efforts and new product launches.

Source: S&P Global