China’s factory activity contracts in July ’25

China’s manufacturing sector contracted further in July, with the official Purchasing Managers’ Index (PMI) falling to 49.3 per cent, down from 49.7 per cent in June, data from the National Bureau of Statistics showed on Thursday.

The reading marked the second consecutive month below the 50 per cent threshold that separates expansion from contraction, reflecting weaker business conditions across the manufacturing industry.

By enterprise size, large manufacturers remained in positive territory with a PMI of 50.3 per cent, though this represented a 0.9 percentage point decline from the previous month. Medium-sized firms posted a PMI of 49.5 per cent, up 0.9 points, while small enterprises fell further behind at 46.4 per cent.

The production index stood at 50.5 per cent, down 0.5 percentage points, indicating continued—albeit slower—output growth. The supplier delivery time index rose slightly to 50.3 per cent, signalling faster delivery times for raw materials.

Meanwhile, the new order index fell to 49.4 per cent, down 0.8 points, underscoring a slowdown in market demand. The raw material inventory index dropped to 47.7 per cent, while the employment index edged up slightly to 48.0 per cent, pointing to a modest improvement in labour market conditions within the sector.

Attribution: Amwal Al Ghad English
Subediting: M. S. Salama