China's producer price index (PPI), which measures costs for goods at the factory gate, dropped 0.3 percent year on year in July, the National Bureau of Statistics (NBS) said Friday.
The reading was the first year-on-year decline this year, the data showed.
On a month-on-month basis, the PPI dropped 0.2 percent last month, narrowing from the 0.3-percent drop recorded in June, according to the NBS.
Factory prices of production materials dropped 0.7 percent year on year in July, compared with the 0.3-percent decline in June.
Among major industries, ferrous metal ore mining saw producer prices jumping 23.7 percent in July, while prices for crude oil and natural gas extraction dropped 8.3 percent year on year.
NBS official Dong Yaxiu said the carry-over effect resulted in a rise of 0.2 percentage points in the PPI growth in July, while new factors dragged down the index by 0.5 percentage points.
Friday's data also showed China's consumer price index, a main gauge of inflation, rose 2.8 percent year on year in July, up from 2.7 percent in June.