FX.co ★ China Manufacturing Shrinks the Most in 6 Months

In July 2025, China's official NBS Manufacturing Purchasing Managers' Index (PMI) decreased to 49.3, down from a three-month peak of 49.7 recorded in June. This decline did not meet analysts' expectations and marked the fourth consecutive month of contraction in the manufacturing sector. July witnessed the sharpest decline since January, with output growth slowing to 50.5 from June's 51.0. Additionally, both new orders and foreign sales experienced their most significant drops in three months, registering at 49.4 from 50.2 and 47.1 from 47.7, respectively, a consequence of reduced demand stemming from newly imposed U.S. tariffs. This weakening trend was mirrored in purchasing activity, which fell to 49.5 from 50.2. Conversely, employment contracted at a slightly reduced rate, moving to 48.0 from 47.9, while delivery times saw a marginal increase, reaching 50.3 from 50.2. On the pricing front, input costs rose for the first time in five months, climbing to 51.5 from 48.4, while selling prices decreased at their slowest rate in five months, easing to 48.3 from 46.2. Despite these challenges, business confidence improved, reaching a four-month high of 52.6 compared to 52.0 in the previous month.