China factory activity sees shock contraction on Covid-19 outbreaks

China’s factory activity unexpectedly contracted in July, reversing earlier economic momentum as sporadic Covid-19 outbreaks weigh on the recovery. The official manufacturing purchasing managers index fell to 49 from 50.2 in June, the National Bureau of Statistics said Sunday. Economists had expected a reading of 50.3, according to the median estimate in a Bloomberg survey of economists. A reading above 50 indicates expansion from the previous month, while anything below indicates contraction. The non-manufacturing gauge, which measures activity in the construction and services sectors, decreased to 53.8 from 54.7 the previous month. That was below the consensus forecast of 53.9.