Home News Private PMI at 50.4 in July, saying manufacturing still growing: Caixin

Private PMI at 50.4 in July, saying manufacturing still growing: Caixin

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PMI File Photo: VCG

Caixin’s Private Manufacturing Purchasing Managers Index (PMI) stood at 50.4 in July, remaining in expansion territory, but down from 51.7 in June due to weak demand, according to the survey.

Analysts say PMI data show weak foundation for expected manufacturing recovery, accelerating implementation of existing growth-promoting policies in third quarter, key window for China’s economic recovery He said that it indicates that there is a need to

The Caixin PMI trend is in line with the official PMI data released on Sunday. The official manufacturing PMI, data from the National Bureau of Statistics showed on Sunday, fell into a contraction range after entering at 49 in July and widening at 50.2 in June.

Values ​​above 50 indicate expansion, values ​​below 50 indicate contraction.

Zhou Maohua, a macroeconomic analyst at Everbright Bank, told the Global Times Monday that an overall slump in demand, higher costs for energy and other raw materials and a short-term heatwave should help the manufacturing recovery in July. said it had slowed down.

Both the production index and the new orders index decreased from the previous month. Companies surveyed by Caixin say weak market demand, the ongoing impact of the pandemic and power shortages are holding back industry growth.

The July manufacturing employment index hit its lowest level since May 2020 as businesses cut costs and dealt with weak sales, according to a survey.

On the bright side, external demand remains stable, continuing June’s upward trend. Other data also show an increase in new orders for consumer and investment goods.

Wang Zhe, senior economist at Caixin Insight Group, said key macroeconomic indicators in the second quarter showed that the short-term impact of the pandemic on the economy had subsided, and that the third quarter was an important part of the recovery. I said it would be the window.

“The authorities have sent signals that no major stimulus package is forthcoming, so accelerating the implementation of existing pro-growth policies will help strengthen the economy in the third quarter, a key window in the recovery. It will be a realistic way to do so,” Wang said. He said.

China has refrained from relying on large amounts of stimulus to spur growth. Thursday’s summit called for boosting domestic demand in the second half of the year, stabilizing employment and prices, and keeping the economy within an appropriate growth band.

China’s cabinet, the State Council, announced on Saturday that it will carry out nationwide inspections across 19 provinces to accelerate the implementation of policies to stabilize growth, market actors, jobs and supply chains.

To boost growth, authorities increased tax rebates, accelerated the issuance of special purpose bonds for local governments and lowered car purchase taxes, among a package of 33 measures announced earlier this year. .

“Policies such as ensuring supply and price stability, bailing out troubled firms, and stabilizing growth can help reduce business pressure and improve corporate profitability. As the economy recovers, it is expected to lead to higher manufacturing output and help improve the labor market,” Zhou said.

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