The National Bureau of Statistics of China and the China Federation of Logistics and Purchasing announced on July 31 that the Manufacturing Purchasing Managers' Index (PMI) for July 2026 recorded 49.2. This marks a decline of 1.1 points from the previous month, falling below the benchmark of 50 for the first time in five months. Both new orders and production, which had been above 50 the previous month, dropped below this threshold.
The new orders index fell by 2.7 points to 48.5, while the production index decreased by 1.5 points to 49.9. This is the first time in two months that new orders have fallen below 50 and the first time in five months for production.
By sector, production and new orders in non-metallic mineral products, steel smelting and rolling processing, and automotive industries all fell below 50. In contrast, general equipment, computer, communication, and electronic equipment showed positive performance, with both indices exceeding 53.0.
New export orders recorded a decline of 0.5 points to 49.6, falling below the benchmark for the first time in two months.
The prices of major raw materials fell by 1.0 point to 53.2, marking a decline for four consecutive months. Shipment prices decreased by 0.4 points to 47.8, remaining below the benchmark for two months.
By company size, the PMI for large enterprises dropped by 1.2 points to 49.5, for medium-sized enterprises it fell by 0.8 points to 49.7, and for small enterprises it decreased by 0.8 points to 47.4. This is the first time in eight months that large enterprises have fallen below 50.
The expected production management activity index, which reflects companies' outlook, stood at 54.1, indicating continued optimism, although it decreased by 0.2 points from the previous month.
The manufacturing PMI is calculated based on data comparing the production and order status of 3,200 companies from the previous month. A reading above 50 indicates expansion in production and orders, while a reading below 50 indicates contraction.
Additionally, the non-manufacturing PMI for July was reported at 49.0, a decline of 1.2 points from the previous month, falling below the benchmark for the first time in three months.
The services sector recorded a drop of 1.1 points to 49.3, falling below 50 for the first time in three months. Among the sectors, postal services, communication, radio, television, satellite information transmission services, and cultural, sports, and entertainment sectors recorded high levels above 55. However, capital market services and real estate continued to remain below 50.
The construction sector fell by 2.0 points to 47.0, marking seven consecutive months below the benchmark.
Meanwhile, the expected business activity index for the non-manufacturing sector slightly increased by 0.1 points to 55.4. The services sector remained unchanged at 56.0, while construction increased by 0.7 points to 51.8.
The non-manufacturing PMI surveyed 4,300 companies.
The comprehensive PMI, which is a weighted average of the manufacturing and non-manufacturing PMIs, stood at 49.3, a decrease of 1.3 points from the previous month, falling below 50 for the first time in five months.
* This article has been translated by AI.
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