In July, China’s official manufacturing Purchasing Managers’ Index came in 51.4 in July, confounding analysts’ expectations of 51.6.
According to the National Bureau of Statistics (NBS) of China, a slowdown in manufacturing growth was due to bad weather conditions and current maintenance in some factories. Meanwhile, imports and exports have been expanding since June.
Despite the fact that production and new orders declined on a monthly basis, the difference between these indicators decreased, signaling improvement in supply and demand growth.
Rising prices however were a "bright spot" as the purchasing price and producer price sub-indices jumped, quelling concerns about deflation in the commodities sector, ANZ Senior Economist Betty Rui Wang said.
Wang said the bank expects a rebound in coming months due to climbing prices and the construction sector index rising to a three-year high in July, point to "vibrant momentum thanks to a robust pipeline of infrastructure projects."
Meanwhile, China's services PMI fell to 54.5 in July from 54.9 in June. Despite the fall in services PMI, July's reading was still higher than the average for the first half of the year.
