Business activity in Chinese industry slows down slightly in July, according to the official PMI. Its value declined from 51.7 points in July to 51.4 points in July, a little below expectations. According to experts from the National Statistics Service, the decrease is due to unfavorable weather conditions and floods in parts of the country, as well as regular maintenance in some enterprises. However, any value above 50 points speaks for expansion, and below 50 for a contraction in the sector.
The imports and exports continue to grow over the previous month.
Although output indicators and new orders are declining, the gap between the two indicators shrinks, indicating improved supply-demand dynamics.
The rising prices are a good signal and distract fears of deflation in the raw materials sector.
National statistics also publish the official service sector index, down from 54.9 points in June to 54.5 points in July. Despite falling, the value in July remains higher than the average for the first half.
Earlier this month, Chinese GDP in the second quarter grew by 6.9%, which was above expectations. Market observers, however, expect growth in the economy to slow down due to tougher housing conditions and the government’s campaign to cut debt.