China's factory gauge fell back under 50 in July, and construction new orders dropped 6.2 points to 40.1
All five of the indices that make up China's manufacturing purchasing managers' index sat below 50 in July.
The headline reading was 49.2, down 1.1 points from June, in the release the National Bureau of Statistics and the China Federation of Logistics and Purchasing timestamped 09:30 on Friday. Anything under 50 means the surveyed activity contracted against the previous month. June was 50.3. July last year was 49.3, so the index has also slipped fractionally below where it stood a year ago.
New orders did most of the damage. The index fell 2.7 points to 48.5, from 51.2. Production went from 51.4 to 49.9, raw material inventories to 48.3 and supplier delivery times to 49.5. Employment was the one component that rose, up 0.5 points, and at 49.0 it is still under the line. Size gave nobody cover: large firms came in at 49.5, medium at 49.7 and small at 47.4, each down between 0.8 and 1.2 points, and all three below the threshold.
New export orders were 49.6, back under 50 after 50.1 in June. Imports fell 2.1 points to 47.5.
The other half of the survey
The non-manufacturing business activity index fell 1.2 points to 49.0. That is the lowest reading in the thirteen months the release tabulates, below the 49.4 recorded in January and in April.
Construction fell 2.0 points to 47.0 and services 1.1 points to 49.3. The order book is where it reads worst. Non-manufacturing new orders were 44.4, down 3.6 points, and inside that figure construction new orders alone fell 6.2 points to 40.1 while services new orders fell 3.2 points to 45.2. Construction employment was 40.9.
Parts of the service economy held up. Postal services, telecommunications, broadcasting and satellite transmission, and culture, sport and entertainment all sat above 55.0. Capital market services and real estate were both under 50.
Selling prices in the non-manufacturing sample were 47.9, down 0.5 points, and they have been below 50 in every one of the thirteen months tabulated. Manufacturers reported input prices at 53.2, down from 54.2, against factory gate prices of 47.8.
The composite output index, which covers both halves of the survey, was 49.3, down 1.3 points.
How the number is made
The survey covers 31 manufacturing industry categories with a sample of 3,200 firms, and 43 non-manufacturing categories with a sample of 4,300. The bureau states the method as probability proportional to size sampling, stratified by industry category, with firms drawn in proportion to operating revenue. Field work is run through the national online reporting system by the bureau's own survey teams. The figures above are seasonally adjusted, and the release says so on every table.
