China’s RatingDog Manufacturing PMI Eases to 50.9, Eighth Month of Growth

RatingDog founder Yao Yu said the manufacturing sector continued to expand in July, albeit at a slower pace. Sustained new order growth and further easing of cost pressures provided support, he said. The return of export orders to expansion was a positive signal. Yao Yu noted that the reduction in purchasing activity and the ongoing accumulation of input stocks warranted attention. The PMI was expected to remain in expansionary territory in the near term, even as the pace of growth becomes more moderate, he said.

Input price inflation eased to its weakest since January. Output prices were flat. That combination means Chinese manufacturing is not adding to global goods price pressures at the moment. In Japan and Australia, PMI data has shown sharper cost increases this cycle, the survey noted.

Chinese goods producers remained optimistic in their 12-month output forecasts. Sentiment strengthened since June on expectations of stronger demand, new product development, and expanded capacity. The survey attributed the improved outlook to expectations of stronger demand, new product development, expanded capacity, and improved efficiency.

Yao Yu said the return of export orders to expansion was a positive signal. The reduction in purchasing activity and the ongoing accumulation of input stocks warranted attention, he added. The PMI is expected to remain in expansionary territory in the near term, even as the pace of growth becomes more moderate.