Thought for the day

New July Survey Shows The Chinese Economy Accelerating in July


 
Last updated: 22 July 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.

China Headline Sales Managers Index (Manufacturing & Services)
Diffusion Index. (50 = 'No Growth')
New July Survey Shows The Chinese Economy Accelerating in July
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.
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