China's manufacturing sector just set a whole bunch of new records -- they're all horrible

China’s manufacturing sector is contracting at its fastest pace in two years.

The Caixin-Markit manufacturing PMI fell to 47.8 in July. Not only was this below the already-dire 48.2 flash estimate released in late July, it was also the lowest level since July 2013.

Activity has now contracted for five consecutive months.

Ugly.

The PMI components are equally as weak as the headline index.

Here’s Markit on the findings of the July survey:

“July data signalled that the downturn in China‚Äôs manufacturing sector intensified at the start of the third quarter. Renewed falls in both total new work and new export orders led manufacturers to cut production at the fastest rate since November 2011. Softer client demand and reduced output requirements contributed to further job shedding and lower purchasing activity, with the latter declining at the sharpest rate since January 2012. Meanwhile, deflationary pressures persisted, with both input costs and output charges declining in July and at faster rates than in the previous month”.

Over the weekend China’s government released its own manufacturing PMI report for July, reporting activity levels neither expanded nor contracted from the month before.

While a separate report — the government surveys all types of manufacturers while Markit focuses on just small to medium-sized firms — the vast differences between the two will not only raise question marks over the comparative strength in the government report but also the reliability of official Chinese economic data releases, including GDP.

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