China July manufacturing slows amid weakened demand for exports

Premier Li Keqiang has set the nation’s 2015 expansion target at about 7 percent [Xinhua]

China’s manufacturing business activity slowed in July, with an important index staying in expansion territory, according to official data released on Saturday.

The manufacturing purchasing managers’ index (PMI), a key measure of factory activity in China, posted 50.0 in July, down from 50.2 posted last month, according to data compiled by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing.

A reading above 50 indicates expansion.

It has held above 50, the dividing line between expansion and contraction, for the last five months.

Zhao Qinghe, a senior NBS analyst, attributed the retreat to continued weakness in both domestic and overseas demand.

He also attributed some companies’ planned production cutbacks for equipment repairs and technological upgrades, as well as unfavorable weather conditions as storms and high temperatures affected production.

The production sub-index posted at 52.4 last month, down from 52.9 in June. The sub-index for new orders came in at 49.9 in July, down 0.2 percentage points compared to June, the data showed.

“The slight decrease was a normal fluctuation,” said Chen Zhongtao, an analyst at the China Logistics Information Center.

Chen added domestic demand will see bigger room for growth in the rest of the year, supported by a raft of infrastructure projects to be rolled out.

Minister of Housing and Urban-Rural Development Chen Zhenggao said in April as much as 1 trillion yuan in investment would be needed if China builds 8,000 km of utility tunnels each year, not including indirect investment such as spending on steel, cement and machines.

In contrast to lukewarm manufacturing activity last month, the nation’s services industry saw stronger growth momentum, with PMI for the non-manufacturing sector rising to 53.9 in July from 53.8 for June, the data showed.

The rise has marked the second straight month of expansion.

 

Source: Agencies