China’s official factory purchasing managers’ index fell to a lower-than-expected 49.2 in August from 50.1 in July, official data showed on Saturday, in a result that is likely to strengthen the case for further policy steps to bolster growth.
The official PMI dipped below 50, which demarcates expansion from contraction, for the first time since November last year, in the latest sign that the world’s second-biggest economy is struggling against global headwinds.
Economists polled by Reuters this week had expected the August official PMI to slip to 50.
China cut interest rates in June and July and has been injecting cash into money markets to ease credit conditions to support the economy that notched a sixth straight quarter of slower growth in the April-June period.
But analysts are divided over whether that will be enough to stop the slowdown extending to a seventh quarter.
The PMI’s output sub-index eased to 50.9 in August from July’s 51.8, the National Bureau of Statistics said.
A flash PMI published last week by HSBC plunged to a nine-month low of 47.8 in August, as new export orders slumped and inventories rose, a signal that a persistent slowdown in economic growth has extended deeper into the third quarter. .
