Thought for the day

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


 
Last updated: 3 July 2024
 
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.

China's Manufacturing & Services continues to contract
Market Growth Index: July 2022
China Lockdowns Impacted on 41% of Companies in July, but Small Rays of Sunshine are Appearing

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.

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

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.  Continue reading for more analysis, charts & data. [SUBSCRIBER ONLY]



More perspectives using World Economics data

China’s Coming Population Collapse
China’s Coming Population Collapse
China has experienced a dramatic fall in fertility rates. With levels already far below replacement, depopulation is imminent. Other factors, such as disease and war, can affect population numbers, but fertility is by far the greatest indicator over time. China’s childbearing levels are currently 50% below the replacement rate. This means that each coming generation will be approximately half as larg...
Has Union with Britain Been an Economic Calamity for Northern Ireland?
Has Union with Britain Been an Economic Calamity for Northern Ireland?
Once upon a time about a century ago, Belfast was bigger than Dublin, and industrial Northern Ireland was much wealthier than the poor agricultural South. Today the roles are reversed. Northern Ireland remains to a considerable extent dependant on handouts from London and is much poorer than prosperous Ireland. Dublin is now three times the size of Belfast and looks (unlike Belfast) like a thriving ...
Czechia’s Contracting Workforce and Growing Retiree Burden
Czechia’s Contracting Workforce and Growing Retiree Burden
Decades of low fertility are causing the working-age population of Czechia to fall. Simultaneously, retirees are living longer and forming an ever-larger part of the population. These factors are causing an extraordinary decline in the number of working-age people available to support the expanding number of retirees. In 1950, each Czech retiree was supported by 8 people of working age. By 2050, it w...