“Employment in manufacturing declined for the seventh month in succession and input-price inflation rose to a five-year high off the back of sterling’s weakness and higher commodity prices”.
Advertisement
The deceleration can be attributed to slowing new order growth and falling services employment, with the latter appearing to be the first time in four months. The index was at 52.4 in June.
While a reading above 50% indicates expansion, this is down from the June reading of 53.2%, meaning the pace last month was less robust.
The official PMI released by NBS for the service sector was 52.6 for July, up 0.4 from June.
A report from influential think-tank the National Institute of Economic and Social Research (NIESR), also out on Wednesday, warned there was a 50/50 chance of a recession over the next 18 months.
Economists polled by Reuters last month saw a 60 per cent chance of recession in the wake of June 23’s vote to leave the European Union, and Britain’s National Institute of Economic and Social Research (NIESR) gave only slightly longer odds when it cut its growth forecast earlier on Wednesday.
“Exporters did report a boost from the weaker pound, however, the improvement in exports was less than previously estimated due in part to sluggish overseas demand”. Also driving it down was the steep decline in oil prices for more than a year.
The index for new business rose to 49.7 from 47.3 in the previous month, which was the lowest since September 2011.
The Caixin services PMI is calculated by Markit, a global financial information services provider, based on data from monthly replies to questionnaires sent to purchasing executives at more than 400 companies. A survey reading above 50 indicates expansion.
“India’s manufacturing economy is reviving at the beginning of the second half of 2016 after the slowdown seen in April-June quarter, as growth of both production and new orders continues to strengthen in July”, Pollyanna De Lima, Economist at Markit and author of the report, said.
Job creation in July hit the fastest clip for almost nine years, Markit said, but service providers said they were less optimistic for the rest of the year than they had been at any point since November 2013, suggesting hiring may slow down.
Markit’s final composite PMI figure for the eurozone – a measure of growth in the continent-wide economy – confirmed a reading of 53.2.
Nearly all economists expect the BoE to reduce rates by at least a quarter percentage point to 0.25 per cent on Thursday, but they are more split on whether it will restart its quantitative easing programme of government bond purchases.
Advertisement
The level is still 0.3% higher than June 2015, and construction spending in the first half of 2016 is 6.2% better than it was during the first six months of a year ago.
