Weekend data – China PMI Manufacturing 50.4 (expected 50.8, prior 50.9) Non-manufacturing 53.3 (exp 53.3, prior 53.5)

• expected 50.8
• previous 50.9
• lowest since February 2020 (which was the huge slump to 35.7 due to the pandemic outbreak in China and initial shutdowns)
• the sub-index for new export orders fell in May, June and now in July to 47.7
• the new order sub-index 50.9 (from prior 51.5)
• those slowdowns in the new export orders and new order sub-index are indicative of slowing demand both offshore and onshore – which are both of concern. Chinese authorities have already indicated faster stimulus efforts in the months ahead, which should impact positively on the domestic order front.
• On the costs side of the ledger, raw material costs rose to 62.9 (previous 61.2). Again, Chinese authorities have been on the case, taking action to slow commodity prices onshore (steel exports limited, for example, I had the headlines on this over the previous week). 

Non-manufacturing 53.3 in July 

• expected 53.3
• previous 53.5
• A little lower on the month but well in expansion, the sub-index for activity expectations rose to 60.1, its been above 60 for 6 months in a row, indicating service business optimism. 
• Adverse weather weighed on construction activity (a still-solid 57.5 from 60.1 in June).