China factory growth slows to four-month low in July, adding to economic slowdown concerns
Growth in new orders slowed to its weakest pace since January
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[BEIJING] China’s manufacturing sector expanded at its slowest pace in four months in July, as output and new orders rose more slowly, while export orders returned to growth after a contraction, a private-sector survey showed on Monday (Aug 3).
The RatingDog China General Manufacturing Purchasing Managers’ Index, compiled by S&P Global, fell to 50.9 in July from 51.7 in June, missing analysts’ forecast of 51.5. The 50-mark separates growth from contraction.
An official survey released on Friday showed China’s factory activity unexpectedly slipped into contraction in July, reinforcing concerns over slowing growth, weak domestic demand and elevated production costs.
China’s leaders pledged at a meeting at the end of July to support the slowing economy by accelerating fiscal spending on already-budgeted infrastructure projects in the remainder of 2026, rather than by planning major new stimulus measures.
Official data showed second-quarter economic growth at its slowest in more than three years at 4.3 per cent, missing the lower end of a full-year target of 4.5 to 5.0 per cent.
The private survey showed growth in new orders slowed to its weakest pace since January. New export orders returned to growth after contracting in May and June, though the increase was only marginal.
Manufacturers added staff for a second straight month, with the pace of job creation the fastest since August 2023.
Stocks of purchases rose for an eighth straight month, the longest such run since 2006-2007, prompting firms to cut purchasing activity for the first time since November 2025.
The backlogs of work rose for a sixth consecutive month, though at the slowest pace in that stretch.
Price pressures eased further. Input price inflation slowed to a six-month low, while output prices were broadly flat as firms held off on raising charges.
Firms remained optimistic about output over the next 12 months, the survey showed. REUTERS
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