July Official PMI Rebounded Modestly

China’s National Bureau of Statistics announced that official Purchasing Managers Index (PMI) rebounded in July to 50.3, from 50.1 in June.

It contrasts with a final reading of the HSBC PMI in July. That measure fell to 47.7 from June’s 48.2.

The majority of the sub-indices of the official PMI showed signs of cyclical upward swing. But the performances of the HSBC sub-indexes were more mixed.

In a report, Goldman Sachs Gao Hua says the positive reading of the official PMI may be a sign of improvement in industrial growth as a result of policy support. The increase in new export order index could point to possible improvement in exports.

The difference between the official PMI and HSBC PMI numbers may indicate that small and medium enterprises (the focus of HSBC PMI) are facing a harder time than large companies.

The two indices have shown different trajectories this year. From Jan to July, the official PMI numbers were 50.4, 50.1, 50.9, 50.6, 50.8, 50.1 and 50.3.

The HSBC PMI were 52.3, 50.4, 51.6, 50.4, 49.2, 48.2 and 47.7.

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