China’s July Logistics Index at 50.4%, Still Expanding
China’s logistics industry prosperity index (LPI) for July stood at 50.4%, down 0.2 percentage points from June but remaining firmly in expansion territory, according to data released by the China Federation of Logistics & Purchasing (CFLP) on August 4. The reading marks the third consecutive month the business volume index has remained above the 50% threshold that separates expansion from contraction, signaling continued resilience in the country’s supply chain sector.
Context: A Resilient Sector Amid Broader Economic Pressures
The July LPI reading comes against a backdrop of broader economic softness. The manufacturing purchasing managers’ index fell to 49.2% in July, below the expansion threshold, while the non-manufacturing business activity index slipped to 49%. Yet the logistics sector has bucked this trend, maintaining expansion through a combination of summer consumption demand and targeted policy support.
According to Xinhua News, railway, road, and postal express delivery business volume indices all remained in expansion during July. The multimodal transport business volume index was particularly strong at 54%, up 0.5 percentage points month-on-month, as multiple regions launched new intermodal routes and operational models.
Key Developments: New Orders Rise for Fifth Straight Month
The new orders index climbed to 50.5% in July, up 0.2 percentage points month-on-month and marking the fifth consecutive month of improvement in 2026. The gains were broad-based across regions: Eastern China rose 0.4 percentage points, while Central and Western China each advanced 0.1 percentage points. By industry, railway transport, road transport, and multimodal transport all saw new orders improve.
The multimodal transport inventory turnover index rose 0.5 percentage points, reflecting rapid growth in cargo intermodal demand and improving efficiency, as Economic Information Daily reported.
Investment and employment metrics also remained in expansion territory. The fixed asset investment completion index and employee index both stayed above 50%, while the business activity expectations index reached 52.8%, indicating that logistics firms remain cautiously optimistic about near-term prospects.
Sector Performance and Summer Consumption Boost
Transportation equipment, communications electronics, electrical machinery, and smart home appliance industries showed steady logistics business growth, driving railway white cargo and road full-truckload volumes. Summer tourism, family, and group consumption activities drove cross-regional passenger flow, commercial flow, and logistics activity. Companies reported increased logistics orders for tourism and outdoor products, local specialties, and fresh produce.
Policy Support: The ‘Six Networks’ Plan
Liu Yuhang, Director of the China Logistics Information Center, attributed part of the sector’s resilience to a wave of policy signals released since mid-July. “The state issued special plans for the consumption sector, setting higher requirements for boosting consumer logistics demand and innovating logistics integration scenarios,” Liu said. “At the end of July, the Central Political Bureau meeting and State Council executive meeting advanced the ‘Six Networks’ plan, accelerating logistics network construction to address weaknesses, improve connectivity, and upgrade capabilities.”
Liu added that as these plans and policies are implemented, they will “strongly promote the improvement of the logistics market.” The “Six Networks” initiative, which includes the logistics network as a key component, builds on earlier measures such as the multimodal transport offensive action plan and urban logistics efficiency connection plans, as detailed in CFLP analysis.
Analysis: Expansion Expected to Hold Despite August Pressures
Hu Han, Deputy Chief Economist at the China Logistics Information Center, noted that investment, employment, and expectations all remain in expansion territory. However, he cautioned that seasonal factors could weigh on the sector in the coming weeks. “Due to the impact of seasonal factors such as high temperatures and heavy rain on logistics operational efficiency, as well as structural adjustments from slowing bulk energy transport demand, pressure is expected to continue in August,” Hu said. “Overall, the logistics industry prosperity index is expected to maintain stable operation in expansion territory.”
The July reading continues a pattern of modest but sustained growth seen throughout 2026. The index stood at 51.2% in January, dipped to 50.3% in May before recovering to 50.6% in June, as reported by People’s Daily and CFLP data. The logistics sector’s ability to maintain expansion even as manufacturing contracts underscores the structural shift toward services and consumption in China’s economy.
What to Watch Next
Analysts will be watching whether the logistics sector can sustain its expansion streak through August, when seasonal weather disruptions typically peak. The implementation of the “Six Networks” plan and related policy measures will be key drivers of logistics demand in the second half of the year. The August LPI reading, expected in early September, will provide the next data point on whether China’s supply chain resilience can withstand the seasonal headwinds.