The official China PMI Manufacturing Index rose to 49.7 in July, up from 49.4 and beat expectation of 49.6. Looking at the details, production, new order, new export order, backlog, purchase volume, import, purchase price,, ex-factory price, employment, production and operation improved. But finished goods inventories, raw material inventory and supplier delivered dropped.
Analyst Zhang Liqun noted that: “Economic downturn is slowing down…. activities have been restored…. there are signs of recovery in production and operation activities, indicating that the effect of macroeconomic policy counter-cyclical adjustment has begun to appear.”
However, he also warned that ” downward pressure on the economy is still not to be underestimated. And, the foundation for stabilization still needs to be consolidated.
Also released, official PMI Non-Manufacturing Index dropped to 53.7, down from 54.2 and missed expectation of 54.0.
