New July Survey Shows the Chinese Economy Accelerating

The First Data on Economic Activity Levels in China - Every Month
The only survey with current month, month-on-month, monthly year-on-year, and forward looking questions
Updated: July 22, 2024

The marked difference between the Chinese Services and Manufacturing sectors performance continues to remain in evidence. The (larger) Services sector is showing significant growth, whereas the Manufacturing sector is slowly pulling out of negative territory. The latest July Sales Managers Survey shows the economy as a whole is now gradually recovering from its period of post Covid diminished economic activity.

Source: World Economics
Note: Data Shown as a Diffusion Index. (50 = 'No Change', above 50 = Increasing growth, below 50 = Declining growth)

The Services sector continues to provide the growth momentum, with the Services survey reflecting high levels of confidence in the future. Growth in the Services Jobs market, a key metric long subdued, is reviving and now at a 5 month high. Overall the survey suggests that the Chinese economy continues to slowly return to its previously healthy levels of economic growth, despite the drag of the less than buoyant Manufacturing sector.

There is no doubt that the Manufacturing sector of the Chinese economy remains subdued. The July reading of the overall Sales Managers Index for Manufacturing remained below the 50 "no growth" line, albeit as of July only fractionally below the growth/no growth area, and at an 8-month high. The good news is that all three months of the All Items second quarter survey registered an improvement on quarter 1 readings, and the overall July reading came in above all three previous months figures, illustrating a building upwards trend.

Readers of an optimistic disposition can start to believe that the world's great growth engine of the past few decades is moving back towards its central role in sponsoring global growth.

Sales Managers Index Components: All-Sectors

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About the Sales Managers Indexes

The Sales Managers' Indexes provide the earliest monthly data on the speed and direction of economic activity in key growth areas of the world.

The SMI’s (Sales Managers’ Indexes) are compiled and analysed by World Economics and are based on survey data collected from a panel of companies stratifying all Industry Classification Board (ICB) sectors which are weighted to reflect their contribution to national Gross Domestic Product.

Key advantages of the SMI's:

• The SMI's provide the first indication each month of the speed and direction of economic growth.
• The SMI's provide the most complete indication of growth, covering all private sector activity.
• The SMI's are based on a key occupational group - sales executives - uniquely able to sense accurate changes in business activity levels.
• The SMI survey base - salespeople - are used by virtually all businesses, including in frontier markets, unlike other occupational groups.
• The SMI's focus on the key countries contributing to over 60% of China growth in recent years.