China's Construction Slump Hits Log Trade Hard

China's construction industry has hit its weakest level since the early days of the Covid pandemic in 2020, with the official construction index falling to 47.0 in July and services activity at 49.3.

The National Bureau of Statistics released data on Friday showing that manufacturing contracted for the first time in five months at 49.2, while the composite index tracking the whole economy sank to 49.3, its lowest since the pandemic ended in 2022.

Economists were caught off guard by the disappointing numbers, with the headline factory index missing the median expectation of 50 and new orders sliding to 48.5, its weakest since 2023.

The construction slump has significant implications for the global log trade, as China is the largest importer of logs in the world, accounting for 55% of New Zealand's forestry exports.