The pace of expansion in China's non-manufacturing activities slowed in July, according to the official factory survey results released on Wednesday. This indicates a weakening in domestic service demand and further highlights the severity of the prolonged real estate industry crisis.
According to data from the National Bureau of Statistics, the official non-manufacturing Purchasing Managers' Index (PMI), which covers the service and construction sectors, fell to 50.2 in July from 50.5 in June. Notably, the 50-point mark separates expansion from contraction in activities, with monthly changes reflecting variations in economic activity.
The decline in this data shows a weakening growth momentum in the service and construction sectors, possibly due to low consumer confidence and weak market demand. In addition, the long-term downturn in the real estate market has also negatively impacted overall economic activities, further weakening the performance of non-manufacturing sectors.
Meanwhile, the comprehensive PMI of the National Bureau of Statistics, which includes both manufacturing and services, also recorded 50.2 in June. This indicates that although the manufacturing and service sectors are still within the expansion range overall, the growth rate has significantly slowed down.
These data suggest that despite a series of measures taken by the Chinese government to stimulate economic growth, challenges remain. The slowdown in the service and construction sectors reflects broader economic issues such as low consumer confidence and a sluggish real estate market. This also highlights the long-term challenges China faces in achieving sustainable growth.
