China’s Manufacturing Purchasing Managers Index (PMI), which measures manufacturing activities in the country, declined to 47.7 in July, compared to 48.2 last month, registering an 11-month low, according to a survey by research firm Markit and HSBC.
The fall in PMI was primarily due to weak operating conditions since August 2012.
A PMI of above 50 indicates an expansion in manufacturing/industrial activity, and below hints at contraction.
Hongbin Qu, chief economist of China & Co and head of Asian economic research at HSBC, said: “The lower reading of the July HSBC Flash China Manufacturing PMI suggests a continuous slowdown in manufacturing sectors thanks to weaker new orders and faster destocking. This adds more pressure on the labour market.
“As Beijing has recently stressed to secure the minimum level of growth required to ensure stable employment, the flash PMI reinforces the need to introduce additional fine-tuning measures to stabilize growth.”
The country’s Manufacturing Output Index also declined from 48.6 last month to 48.2 this month, registering a nine-month low.
The PMI data is based on data compiled from monthly surveys involving purchasing executives of more than 420 manufacturing firms of China during 12 to 22 July 2013. The PMI estimate data is designed to provide an accurate indication of the final PMI data.