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China Lockdowns Impacted on 41% of Companies in July, but Small Rays of Sunshine are Appearing

The First Data on Economic Activity Levels in China - Every Month
The only survey with current month, month-on-month, monthly year-on-year, and forward looking questions

Updated: July 22, 2022

The July Sales Managers Index continues to illustrate the heavy toll being taken on the Chinese economy by continuing Government attempts at preventing the spread of Covid. The impact, even in areas not locked down, has been severe, and continues to cause difficulties for many companies, but business confidence is slowly returning, particularly in the Manufacturing sector. The Manufacturing Business Confidence index (which relates to confidence in the future, not current circumstances) rose from 50.2 in June to a significantly higher 51.7 level in July.

As already noted, Manufacturing has been badly affected with factories unable to operate entirely closed off from supply chains, and current activity remains depressed. The Manufacturing Market Growth Index came in close to a 25 month low in June, and although registering marginally better numbers in July, remained well below the 50 "no-growth". The Sales Growth Index remains very low in relation to the past, recording a 26 month low point in July. However, this index also remains over the 50 no growth level.

Market Growth Index for Manufacturing


Source: World Economics
Note: Data Shown as a Diffusion Index. (50 = 'No Change', above 50 = Increasing growth, below 50 = Declining growth)
0 0 0 USA|#0A66C2|48.5, 45.4, 46.1, 44.6, 47.1, 47.1, 47.5, 46.6, 46.8, 48, 49, 48.7, 49.8, 50, 51.7, 51.5, 51.2, 52.2, 52.2, 53.9, 51.9, 50.2, 48.6, 49.7, 51.4, 50.3, 50.5, 46.9, 45.3, 46.4, 46.9 Jan 2020, Feb 2020, Mar 2020, Apr 2020, May 2020, Jun 2020, Jul 2020, Aug 2020, Sep 2020, Oct 2020, Nov 2020, Dec 2020, Jan 2021, Feb 2021, Mar 2021, Apr 2021, May 2021, Jun 2021, Jul 2021, Aug 2021, Sep 2021, Oct 2021, Nov 2021, Dec 2021, Jan 2022, Feb 2022, Mar 2022, Apr 2022, May 2022, Jun 2022, Jul 2022




Despite these rather sombre numbers, the Staffing Index rebounded in July to a positive 50.2 reading. This is particularly significant as the Staffing Index records year on year growth, as opposed to month on month changes.

Staffing Levels Index for Manufacturing


Source: World Economics
Note: Data Shown as a Diffusion Index. (50 = 'No Change', above 50 = Increasing growth, below 50 = Declining growth)
0 0 0 USA|#0A66C2|49.5, 47.8, 49.3, 47.8, 46.5, 47.9, 48.8, 50, 50, 51.5, 51.9, 50.5, 51.2, 50.9, 51.7, 50.7, 50.2, 50.5, 52.2, 51.4, 49.8, 50.9, 50.3, 50, 50.3, 50.2, 51, 48.6, 47, 48.6, 50.2 Jan 2020, Feb 2020, Mar 2020, Apr 2020, May 2020, Jun 2020, Jul 2020, Aug 2020, Sep 2020, Oct 2020, Nov 2020, Dec 2020, Jan 2021, Feb 2021, Mar 2021, Apr 2021, May 2021, Jun 2021, Jul 2021, Aug 2021, Sep 2021, Oct 2021, Nov 2021, Dec 2021, Jan 2022, Feb 2022, Mar 2022, Apr 2022, May 2022, Jun 2022, Jul 2022




The Services sector did little better, with all the growth related indexes below or marginally above the 50 level.

Market Growth Index for Services


Source: World Economics
Note: Data Shown as a Diffusion Index. (50 = 'No Change', above 50 = Increasing growth, below 50 = Declining growth)
0 0 0 USA|#0A66C2|47.4, 43.8, 47.2, 44, 47.2, 45.8, 46.2, 49.2, 50.6, 50.4, 50.4, 50.4, 51.8, 52.4, 50.2, 52.4, 51.8, 51.4, 52.8, 51.4, 51.6, 52.6, 51.6, 51.4, 50.4, 50.4, 48.8, 44.9, 46, 46.8, 47.8 Jan 2020, Feb 2020, Mar 2020, Apr 2020, May 2020, Jun 2020, Jul 2020, Aug 2020, Sep 2020, Oct 2020, Nov 2020, Dec 2020, Jan 2021, Feb 2021, Mar 2021, Apr 2021, May 2021, Jun 2021, Jul 2021, Aug 2021, Sep 2021, Oct 2021, Nov 2021, Dec 2021, Jan 2022, Feb 2022, Mar 2022, Apr 2022, May 2022, Jun 2022, Jul 2022




The joint Manufacturing & Services overall Sales Managers Index perhaps sums up the situation best, recording movement between June to July from 49.6 to 49.7. July was a marginally better month, but overall business conditions remain sitting on the fence poised between growth and decline.

The Services sector did a little better, with Business Confidence back into the >50 positive growth zone. However the more general Services Market Growth Index stayed low with a reading of 46.8 indicating further contraction in service sectors throughout China.



About the Sales Managers Indexes

The Sales Managers' Indexes provide the earliest monthly data on the speed and direction of economic activity in key growth areas of the world.

The SMI’s (Sales Managers’ Indexes) are compiled and analysed by World Economics and are based on survey data collected from a panel of companies stratifying all Industry Classification Board (ICB) sectors which are weighted to reflect their contribution to national Gross Domestic Product.

Key advantages of the SMI's:

  • The SMI's provide the first indication each month of the speed and direction of economic growth.
  • The SMI's provide the most complete indication of growth, covering all private sector activity.
  • The SMI's are based on a key occupational group - sales executives - uniquely able to sense accurate changes in business activity levels.
  • The SMI survey base - salespeople - are used by virtually all businesses, including in frontier markets, unlike other occupational groups.
  • The SMI's focus on the key countries contributing to over 60% of China growth in recent years.






About the Data

SMI data for China is published as diffusion indexes to gauge the speed and direction of economic activity.

Monthly data since 2013 is downloadable for all-sectors, manufacturing and service sectors separatly in a consistent unadjusted format for 7 key indexes: