Sentiment in China’s economy deteriorated at the start of the second half of the year, with the official manufacturing purchasing managers’ index (PMI) falling below the threshold separating growth from contraction.
The PMI dropped to 49.2 points in July from 50.3 in June, the National Bureau of Statistics said on Friday. A reading above 50 indicates expansion, while a reading below 50 points to contraction.
Activity also weakened in other parts of the economy. The PMI for services and construction fell to 49 from 50.2, while the composite PMI dropped to 49.3 from 50.6.
The decline in new manufacturing orders was particularly pronounced, the data showed.
The figures add to signs that China’s economy is losing momentum. Gross domestic product in the world’s second-largest economy grew 4.3% year-on-year in the second quarter, slowing from 5% growth in the first quarter.
The Communist Party’s Politburo said on Thursday that further support would be provided to the economy, including faster deployment of government funds and measures to boost domestic demand. However, it did not announce any specific steps.