BEIJING – China’s Purchasing Manager Index (PMI), an indicator of the economic health for manufacturing and service sectors, stood at 51.1 points in July, extending its growth streak for the fifth consecutive month, according to official data released on Friday.
The figure beat the expectations of analysts, who had predicted a PMI of 50.7 points for this month.
An index reading above 50 signifies expansion, while a reading below this means contraction.
The figure, released by the country’s National Bureau of Statistics (NBS), shows a recovery since the indicator avoided contraction for the fifth consecutive month after plummeting to 35.7 points in February due to a halt in economic activity in the country on account of the coronavirus.
In February, the coronavirus crisis caused a decline in manufacturing even greater than the 38.8 points it recorded in November 2008, during the global economic crisis.
In a breakdown by size, the indicator for large firms declined by 0.1 points in July to 52 while for medium ones it grew by 1 point to 51.2, and for small ones it shrank by 0.3 points to 48.6.
Three of the five sub-indices that make up the manufacturing PMI were above the 50-point threshold: the sub-index for production at 54 points, that of new orders at 51.7 and that of supplier delivery times at 50.4.
However, the sub-index for employment declined by 0.2 points to 49.3 and that of provision of raw materials stood at 47.9.
The PMI for businesses not related to manufacturing was 54.2 points in July. It stood at 54.4 points in June, 53.6 in May, 53.2 in April, 52.3 in March and a dismal 29.6 in February.
The services sector, which represents more than half of the country’s gross domestic product, stood at 53.1 points in July, following figures of 53.4 and 52.3 in June and May, respectively.
The NBS indicated that, in the breakdown of these businesses, only the sales price index expanded to 50.1 points, an increase of 0.6 points from the previous month and a return to growth.
The index of expected economic activity, which measures the confidence of non-manufacturing companies in future market development, grew 1.9 points to 62.2.
The comprehensive PMI production index, combining manufacturing and non-manufacturing industries, stood at 54.1 points in July as compared to 54.2 in June.
NBS statistician Zhao Qinghe said in a statement on Thursday that prevention and development plans had proved effective and operations continued to improve.
Zhao also highlighted the rebound in production and the progressive increase in demand and expectations for the future.
For the first time since the start of the pandemic, he added, China’s powerful textile industry was above the growth threshold.