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Investing.com-- China’s manufacturing sector unexpectedly shrank in July, private purchasing managers index data showed on Friday, as a drop in export orders and weak domestic demand weighed.
The S&P Global China Manufacturing PMI fell to 49.5 in July from 50.4 in June, also missing expectations that it would ease only slightly to 50.2. A reading below 50 indicates contraction, with the S&P reading now shrinking for the second time since October 2023.
The S&P data (previously released by Caixin) was largely in line with government manufacturing PMI released on Thursday, which showed Chinese manufacturing activity declining in July. The government data also cited disruptions caused by extreme weather conditions in the country.
The S&P PMI focuses on smaller, private-run firms, while the government reading tracks larger state-run companies. Investors use both readings for a full view of the economy.
Friday’s data showed export orders remained weak despite a recent cooling in trade tensions between China and the United States.
But the U.S. still maintained about 50% tariffs on China, even after the two agreed in May and June to slash their respective tariff levels.
Weak PMI readings for July further underscored the need for more economic support from Beijing, as an initial boost from a swathe of consumer subsidies now appeared to be running dry.