China’s official manufacturing purchasing managers index came in better than expected, rising to 51.1 in July from 50.9 in June for its highest reading since March.
July marked the fifth consecutive month that the closely watched measure of China’s factory activity topped the 50 mark that separates expansion from contraction.
Meanwhile, China’s official non-manufacturing purchasing managers index remained above 50 but ticked lower to 54.2 in July, indicating a slight deceleration in the service sector as heavy floods hit parts of central and southern China.
Taken together, the data suggests China’s factories have returned to pre-coronavirus levels but consumer demand remains much weaker, which means inventory is piling up.
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