China’s manufacturing activity slowed in July for export-oriented firms, according to a private survey, in line with an official gauge. The data, released by a leading market research firm, shows a modest decline in the Purchasing Managers’ Index (PMI) for the month, reflecting a broader trend of cooling production in the country’s key export sectors. The private survey’s findings mirror the official PMI published by the National Bureau of Statistics, which also recorded a slight dip from the previous month’s reading. Analysts note that the slowdown is largely driven by a decline in overseas demand and a tightening of supply chain constraints, which have impacted the output of major exporters.

The survey’s methodology involved surveying a cross-section of manufacturers across China, focusing on production, new orders, and employment. While the overall change is small, it signals a potential contraction in the manufacturing sector if the trend continues. The official gauge, which is released monthly, provides a benchmark for market participants, and its alignment with the private survey adds credibility to the observed slowdown.

Investors and policymakers are watching the PMI closely, as it is a key indicator of economic health. A sustained decline could prompt more accommodative policy measures to support growth.

The report underscores the importance of monitoring both private and official gauges to assess the true state of China’s factory activity and its implications for global trade flows.