A private gauge of China's factory activity rose for a second straight month in July and hit its highest level in four months, indicating a faster pace of expansion despite official data showing renewed weakness in production and demand.
The Caixin China manufacturing purchasing managers' index rose to 51.1 in July from 50.4 in June, Caixin Media Co. and research firm Markit said Tuesday. The 50 level separates an expansion in manufacturing activity from a contraction.
Subindexes of output and new orders expanded at fastest paces since February, thanks to a solid upturn in new export sales, Caixin said. Both input costs and output prices continued to rise to hit four-month highs, it said.
"Operating conditions in the manufacturing sector improved further in July, suggesting the economy's growth momentum will be sustained," Zhengsheng Zhong, an economist at CEBM Group, said in a statement accompanying Tuesday's release.
"That said, it's unlikely that financial regulatory tightening will be relaxed," he added.
The Caixin PMI reading comes after China's official manufacturing PMI, a competing government gauge, slipped to 51.4 in July from 51.7 in June, dragged down by slower production and weaker demand, according to National Bureau of Statistics data released Monday.
Economists expect China's economy to slow in the second half of 2017 as government measures to rein in a hot property market and rising corporate debt start to weigh more on business sentiment and economic activity.
The Caixin China Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives at more than 400 manufacturing companies.
Compared with the official gauge, the Caixin PMI tends to more closely track small private manufacturers in China that don't benefit as much from government stimulus as state-owned firms.?
-- Grace Zhu
(END) Dow Jones Newswires
July 31, 2017 22:20 ET (02:20 GMT)