China’s manufacturing activity shrank for a third straight month in July, a private survey of Chinese manufacturers showed on Wednesday, highlighting persistent weakness in both external and domestic demand.
The closely-watched flash estimate of the HSBC China Purchasing Manager’s Index (PMI) fell to an 11-month low of 47.7 from 48.2 in June. This was significantly below market expectations for the index to hold steady at 48.2.
A reading above 50 indicates expanding activity and one below 50 signals contraction.
The slowdown in the manufacturing sector is leading more factories to cut back on workers, with the unemployment sub-index falling to a 52-month low of 47.3.
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