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Manufacturing Activity Slows in China

Manufacturing activity in China slowed in July. China’s official manufacturing Purchasing Managers’ Index dropped slightly from 51.7 in June to 51.4 last month. July’s reading came in a pinch below the predictions of Reuters-polled economists, who had forecast a score of 51.6.

Despite the slowdown from June, China’s manufacturing activity still expanded overall. Index readings above 50 indicate expansion.

According to National Bureau of Statistics Senior Statistician Zhao Qinghe, the slowdown in July was due, in part, to bad weather conditions and flooding in parts of the country. Routine maintenance also likely contributed, the statistician said. A slip in export demand might have been a factor, too. A reading on new export orders dropped to 50.9 in July, down from 52 in June. That impacted the index for overall factory orders, which fell to 52.8 from 53.1.

In July, China reported its economy grew 6.9% in the second quarter – a showing that beat expectations. Still, analysts expect that growth will taper off in the months ahead given tighter reins on borrowing, stricter controls on the real estate market and other factors.