Expansion in Chinese manufacturing sector hits lowest level in months

Expansion in China’s manufacturing sector hit its lowest level in nearly a year and a half in July, with activity slumping in the latest sign of slack in the world’s second-largest economy.

China’s official manufacturing purchasing managers’ index, a gauge of manufacturing activity, fell to 50.4 in July from 50.9 in June, according to data released Saturday by the National Bureau of Statistics.

The July reading also fell below a median forecast of 50.8 from a Wall Street Journal poll of economists, but still remained above 50 separating expansion and contraction.

Below the headline, the manufacturing subindex fell to 51.0 in July from 51.9 the previous month, as recent record rains in central China and the Yangtze River Delta caused flooding and tangled supply chains. Power shortages in some cities held back production.

The new export orders sub-index plunged deeper into the contraction zone to 47.7 in July from 48.1 in June, suggesting weakening foreign demand for Chinese goods as the overseas pandemic situation worsened.