China's official non-manufacturing PMI fell to 49.0 in July as construction dropped to 47.0

China's National Bureau of Statistics reported on Friday 31 July 2026 that the country's official non-manufacturing PMI fell to 49.0 in July. The index stood at 50.2 in June and markets had expected it to hold flat. The reading marks a return to contraction after two months of modest expansion.

The services business activity index declined to 49.3 from 50.4, while the construction index dropped to 47.0 from 49.0. Within services, postal and telecommunications, broadcasting, and culture and entertainment stayed strong with activity indices above 55.0, while capital market services and real estate remained in contraction. The new orders index fell to 44.4 from 48.0, with construction down to 40.1 from 46.3 and services easing to 45.2 from 48.4. On prices, input costs were unchanged at 49.7 while selling prices slipped to 47.9 from 48.4. Employment edged down to 45.4 from 45.8, though business expectations improved slightly to 55.4 from 55.3.

Weakness in Chinese construction matters for steel and iron ore, since the country's building demand is one of the main drivers of world prices for those commodities.