According to the Service Industry Survey Center of the National Bureau of Statistics and the China Federation of Logistics and Purchasing on July 31, China's manufacturing Purchasing Managers' Index (PMI) fell 1.2% from the previous month; the non-manufacturing business activity index and the composite PMI output index were 53.8% and 52.5%, respectively, expanding for two consecutive months. National Bureau of Statistics experts interpret that the overall economic economy has fallen, the foundation still needs to be solid.

Cost-end and fee-end prices fell sharply, and the supply chain is generally stable

Some manufacturing sectors recovered in July. Among the 21 industries surveyed, 10 industries had PMI in the expansion range, among which the PMI of agricultural and sideline food processing, food and beverage refined tea, special equipment, automobiles, railway, shipping and aerospace equipment and other industries was above 52%, expanding for two consecutive months, and production and demand continued to recover.

The July supplier delivery time index fell again below the line between expansion and contraction. Backlogs fell for the second consecutive month in July due to relatively few new businesses and companies with enough capacity to handle backlog orders.

Some companies are hoarding commodities that have recently fallen prices, raw material purchases have increased slightly, and the raw material inventory index has risen in the expansion range. The finished goods inventory index remained in contraction territory, but the decline has narrowed, due to shipments to customers and a reluctance to increase inventories due to weak demand.Manufacturing companies remained optimistic in July, but the production and operation expectations index fell slightly over concerns about weak demand and a rebound in the pandemic.

The prosperity of some industries has increased, promoting the growth of industrial automation demand

The sales side was greatly constrained by weak demand, and the ex-factory price index fell below the line for expansion and contraction for the third consecutive month, and the decline widened, but the ex-factory prices of consumer goods rose.

From the perspective of industry, the expected index of production and operation activities of agricultural and sideline food processing, special equipment, automobiles, railway and ships, aerospace equipment and other industries in July is located in the high business range of more than 59.0%, and the industry market is expected to be generally stable.

In July, the equipment manufacturing PMI and the high-tech manufacturing PMI were 51.2% and 51.5%, respectively, down 1 and 1.3 percentage points from the previous month, but both remained in the expansion range of above 51%. The sub-index showed that the growth rate of supply and demand of both the equipment manufacturing industry and the high-tech manufacturing industry has remained at a relatively good level, indicating that although the growth rate of new growth drivers has slowed down, it is still in an upward momentum, and the industrial structure continues to optimize.

It is expected that the market to maintain high prosperity in the second half of the year is also mainly in these new infrastructure projects, such as new energy industry chain, semiconductors, smart logistics, etc., which will become the main driving force for the growth of industrial automation demand.

Finally, in terms of enterprise size, the PMI of large and medium-sized enterprises was 49.8% and 48.5%, respectively, down 0.4 and 2.8 percentage points from the previous month, both below the critical point; the PMI of small enterprises was 47.9%, down 0.7 percentage points from last month, indicating that the overall manufacturing enterprises in July are not good.

Overall, the positive epidemic situation in July helped the manufacturing sector continue to recover. Supply and demand continue to improve, strong and weak pattern maintained; job market feedback is delayed, still in the contraction range; cost side is rising, fee end continues to fall, corporate earnings face challenges; market optimism maintained, but concerns about the economic outlook are still there.