2026.07.3101:30:00UTC+00China’s Services Activity Slips Back Into Contraction as July Non-Manufacturing PMI Falls Below 50

China’s services and construction sectors showed renewed signs of weakness in July, as the country’s Non-Manufacturing Purchasing Managers’ Index (PMI) slipped back into contraction territory. The indicator fell to 49.0 in July 2026, down from 50.2 in June 2026, according to data updated on 31 July 2026.

The move below the 50-point threshold, which separates expansion from contraction, suggests a deterioration in activity across China’s broader non-manufacturing economy after a marginal expansion the previous month. The decline from June’s 50.2 reading to 49.0 in July may raise concerns about the resilience of domestic demand and the momentum of China’s post-pandemic recovery, particularly in key services industries.

With July’s reading marking a shift back into contraction, market participants and policymakers are likely to watch upcoming data closely for confirmation of whether this signals a temporary soft patch or the beginning of a more sustained slowdown in China’s non-manufacturing sector.