Financial News: China Manufacturing Activity Slips Into Contraction

China Manufacturing Activity Slips Into Contraction

08/01/2025 - 02:32:00 (RTTNews)

(RTTNews) - China's factory activity contracted in July as softening new orders forced manufacturers to scale back production and staffing, purchasing managers' survey results from S&P Global showed on Friday.

The manufacturing Purchasing Managers' Index fell to 49.5 in July from 50.4 in June. A score below 50.0 indicates contraction.

Production declined only for the second time since October 2023 and the fall reflects slower growth in new orders. Export orders shrank for the fourth straight month in July.

A combination of falling production and stable backlogs prompted manufacturers to lower their headcounts in July.

Although production declined in July, sentiment among manufacturers improved on hopes that better economic conditions and promotional efforts will spur sales in the year ahead.

Purchasing activity increased after falling over the previous two months. Finally, supply chain conditions continued to deteriorate due to shipment delays and supplier shortages.

Regarding prices, the survey showed that average input prices rose for the first time in five months in July. However, manufacturers lowered their selling prices as market competition intensified.

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