By Gina Lee
Investing.com – China reported an expansion in factory activity in July, continuing a five-month streak even amid floods and rising COVID-19 cases globally.
The National Bureau of Statistics reported an official manufacturing Purchasing Manager’s Index (PMI) of 51.1 earlier in the day. The highest reading since March, it beat June's figure of 50.9 as well as analyst forecasts of 50.7 prepared by Investing.com.
But the bureau also reported a composite PMI of 54.1, slightly lower than June’s 54.2, and a non-manufacturing PMI of 54.2, also slightly lower than June’s 54.4.
PMI readings above 50 indicate expansion.
The figures indicate a recovery from lockdowns imposed earlier in the year to control the COVID-19 outbreak. But recent outbreaks in Xinjiang as well as in the northeastern part of the country are an indication that China’s battle against COVID-19 is far from over.
Ever-increasing COVID-19 cases globally continue to keep factories operating below strength as demand continues to be low. New export orders continued to fall, and unemployment number remained high, with companies letting go of more employees than they hired.
Some investors remained cautiously optimistic, with the number of COVID-19 cases showing no signs of slowing down.
“We see a slowdown in sequential momentum in the third and fourth quarter, though activities should continue to improve further with the base case assumption that Covid-19 remains under control in China,” Wang Tao, chief China economist at UBS AG, said in a report released ahead of the data.