BEIJING: A key gauge of Chinese manufacturing activity plunged to a two-year low in July, an independent survey showed Monday, the latest data suggesting the world's second-largest economy faces downward pressure in the third quarter.
The final reading of Caixin's Purchasing Managers' Index (PMI) came in at 47.8 for the month, the Chinese media group said in a joint statement with Markit, a financial information services provider that compiled the survey, down from a preliminary 48.2.
The figure was below the 49.4 registered in June and was the weakest reading since 47.7 in July 2013, according to previous data.
The index, which tracks activity in factories and workshops, is seen as a key barometer of the country's economic health.
A figure above 50 signals growth, while anything below indicates contraction.
"July data signalled that the downturn in China's manufacturing sector intensified at the start of the third quarter," Caixin and Markit said in the release.
"Renewed falls in both total new work and new export orders led manufacturers to cut production at the fastest rate since November 2011."
The result, which missed a median estimate of 48.3 in a survey by Bloomberg News, came after China announced on Saturday that its official PMI slowed further in July, decelerating to 50.0 from 50.2 in June according to the National Bureau of Statistics.
Caixin took over sponsorship of the PMI survey from British banking giant HSBC from July.
"The weaker Caixin PMI, together with a lower official PMI, suggests that growth momentum may have slowed slightly in July," Nomura economists said in a reaction.
The results mean that China's year-on-year industrial production growth for last month may come in lower than their current estimate of 6.8 percent, they added. Industrial output expanded 6.8 percent in June, an acceleration from May.
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