No sooner had Chinese industry begun to recover from the lifting of anti-covid measures than another unexpected blow came. Industrial activity unexpectedly fell in July, and this time it is again due to the coronavirus epidemic, which has intensified again in China.
Decline in industrial activity
The Industrial Purchasing Managers’ Index (PMI) fell to 49 points in July from 50.2 points in June. Citing China’s National Bureau of Statistics, Reuters reported. At the same time, a value below 50 points indicates a decline in industrial activity, while a PMI above 50 points indicates its growth. Moreover, China’s industrial PMI is the lowest in three months.
What is the global economic outlook?
In addition to the rise of the coronavirus epidemic, weaker foreign demand is also behind the decline in industrial activity due to persistently high inflation in the world. And the global economic outlook has also deteriorated, downgrading the prospects for solid growth in china’s economy for the rest of this year. As a result, industrial production is also weakening.
According to an estimate by the analytical portal World Economics, anti-epidemic measures in China have already affected more than 40 percent of companies this year. This is also why industrial activity in the country fell in July.