China’s Manufacturing Sector Grows at Faster Than Expected Pace in July
Arslan Butt • 1 min read
Even as most of the world still reels under the effects of the raging coronavirus crisis, China’s manufacturing sector experienced the fastest pace of growth in almost 10 years during the last month over an improvement in domestic demand as China recovers after bringing the pandemic under control. The Caixin/Markit Manufacturing PMI increased to 52.8 in July from 51.2 in the previous month, remaining over the 50-threshold indicating expansion for the third consecutive month.
The figure came in better than expected, beating the economists’ forecast for a reading of 51.3 instead. Even though the improvement in the reading was driven by higher domestic demand, the manufacturing sector in China faces some pressure as employment and export orders continue to remain weak.
According to July’s survey, factory output as well as total new orders grew at the fastest pace since July 2011, while output prices registered the fastest growth in almost two years. However, with the pandemic still raging on in most parts of the world, new export orders continued to contract for the seventh consecutive month.
With economic recovery still a long way off in the US – China’s key trading partner, and most of the other parts of the world, manufacturers in China continue to experience a reduction and even cancellation in the number of export orders, which is keeping the sector under strain. On a positive note, however, the upbeat figures for domestic demand indicate that China is bouncing back towards recovery after overcoming the coronavirus crisis from earlier this year.