China’s Factory Activity Shrinks for First Time in Three Months as Recovery Falters, Caixin PMI Shows

Activity in China’s manufacturing sector shrank in July following sluggish expansion in the previous two months as output and new orders weakened, adding to evidence the country’s economic recovery is faltering, a Caixin-sponsored survey showed Tuesday.

The Caixin China General Manufacturing Purchasing Managers’ Index (PMI), which gives an independent snapshot of the sector, dropped to 49.2 from 50.5 in June, the second consecutive monthly decline and the first contraction in three months. An index reading above 50 signals an expansion in activity, while a number below that indicates a contraction.