Purchasing managers’ index plunges into the negative

Sentiment in the Chinese economy is deteriorating again. The official Purchasing Managers’ Index (PMI) for the manufacturing sector surprisingly slumped again in July, according to data released by the National Bureau of Statistics (NBS) on Sunday. Bloomberg reports that it fell from 50.2 to just 49.0, meaning that the indicator is now once again pointing to a shrinking economy: It is once again below the so-called expansion threshold of 50 points. Values above 50 indicate growth in economic activity, while values below indicate a decline. Until June, the index had been in negative territory for months – probably due to the many lockdowns in the country. The renewed slump is now dampening hopes of a rapid trend reversal.