Global economic recovery could be progressing slower than expected as China – the world’s second largest economy – revealed more signs of slowdown. This time the release of industry data showed a contraction in manufacturing and sent several stock markets plunging.

The Caixin China Services Purchasing Managers Index (PMI) is a survey based on data gathered from Chinese industry executives and on Friday it showed that the index dropped in August to 47.1 in comparison to the previous month’s 47.8. Not only was the result under the estimate by analysts (47.7), but it remained under 50 which signals contraction. The factory data was at the lowest level for the last six years, when the global financial crisis was at its peak, and also remained under the 50-point level since March. The manufacturing data decline is the latest piece of worrying economic news after a series of below-forecast report releases. Earlier in the month the release of China’s Q2 Gross Domestic Product (GDP) revealed an expansion by only 7%, the lowest reading of the last six years, and also the yuan devaluation which lead to the Chinese stock market’s plunge. During 2014 the Chinese GDP mirrored an expansion by 7.4%, and while many might read this as an excellent rate of growth it is in actual fact the lowest expansion of the last 25 years.

Traders took notice of the immediate impact to the Shanghai Composite Index which decreased 14%, however other major stock markets worldwide were also noticeably affected. U.K.’s FTSE 100 on Friday had a negative reaction as it dipped by 2.5% while on a weekly basis the index saw its largest decrease of 2015 by an enormous 7.4%. The German DAX 30 and French CAC 40 also felt the negative force of the Chinese economy with weekly declines of 10.2% and 8.4% respectively. Shares also dropped in New York with the S&P 500 slipping on Friday by 2.9% and the Dow Jones decreasing by 2.3%.

The unquestionable negative impact of the Chinese economy’s slowdown in growth is a very clear reminder that China is no longer just a global goods production line but now also a large consumer of both products and services. There is an increasing number of producers who highly depend on how well their products will perform in China and hence the lack of demand made it difficult to reach their sales targets. Many investors now forecast that there might be more loss of momentum from the Chinese economy, and that could force the People’s Bank of China (PBC) to take additional corrective measures, while others believe that the global markets negatively overreacted and they soon expect a recovery of stocks.

Regardless whether the markets overreacted to the second largest economy’s slowdown, this week now presents the opportunity to measure the performance of the world’s largest. Coming up is the release of the U.S. GDP preliminary data for Q2 2015, due on Thursday 27 August at 12:30 GMT. Even though many traders already began to lose faith on the prospect of the Federal Reserve (Fed) increasing interest rates in September, could the result be enough to upset the markets?