China PMIs Tumble Into Contraction as GDP Growth Hits Multi-Year Low
China's manufacturing and services PMIs both dropped below 50 in July, signaling contraction, while Q2 GDP growth slowed to 4.3% YoY, the weakest expansion since Q4 2022.
China's manufacturing Purchasing Managers' Index (PMI) fell 1.1 points in July to 49.2, one of the lowest readings since 2023. This marks the first sub-50 reading since February, indicating contraction in the sector.
The non-manufacturing PMI, which covers construction and services, dropped 1.2 points to 49.0 — the lowest level since December 2022. Construction PMI alone sank 2.0 points to 47.0, its weakest since the 2020 pandemic.
Meanwhile, GDP growth slowed to just 4.3% year-on-year in the second quarter of 2026, the softest expansion since Q4 2022. The data underscores a broad-based slowdown spreading across the Chinese economy.
Source: The Kobeissi Letter