China's manufacturing activity expands for 12th straight month



China's manufacturing sector expanded in July for the 12th month in a row, indicating strength in the world's second largest economy, according to official data on Monday.

The country's manufacturing purchasing managers' index (PMI) came in at 51.4 in July, the National Bureau of Statistics (NBS) said.

A reading above 50 indicates expansion, while a reading below reflects contraction.

Not since July 2016 has the PMI been below the 50-point mark.

The Purchasing Managers' Index (PMI) is an economic indicator on how healthy the manufacturing sector is.

It intends to give decision makers, purchasing managers and analysts a sense of how healthy current business conditions are.

The PMI is usually calculated based on five major indicators; new orders, inventory levels, production, supplier deliveries and the employment environment.

In sub-categories, production index, new orders index, and supplier deliveries indices are all higher than the 50 mark, but inventory levels and employment environment indices are both under 50.

Manufacturing activities slowed 0.3 percent from June's 51.7.

NBS senior statistician Zhao Qinghe attributed the reason to the persistent heat wave in many parts of China, and heavy rain floods in certain areas.

Some enterprises are also facing routine equipment checks and repairs, leading to a slowdown in manufacturing activities.

Despite the slower manufacturing activity expansion, firms continued to increase purchases with stronger confidence about their future growth, according to Zhao.

The sub-index for the quantity of purchases rose to 52.7 from 52.5 in June, while that for expectations on production and business operations climbed to 59.1 from 58.7, the third consecutive month of increase.