China’s factory activity shrinks for first time in 3 months in August as orders weaken
- Caixin/Markit manufacturing purchasing managers’ index (PMI) slid to 49.5 in August from 50.4 in July
- On Wednesday, China’s official manufacturing PMI rose to 49.4 in August, up from 49 in July
China’s factory activity contracted for the first time in three months in August amid weakening demand, while power shortages and fresh coronavirus flare-ups disrupted production, a private sector survey showed on Thursday.
“The larger-than-expected drop in Caixin manufacturing PMI was more significant than the slight rise in the official PMI, suggesting that downward pressure on industry intensified last month,” said Julian Evans-Pritchard, senior China economist at Capital Economics.
“There is more pain on the horizon given the coming downturn in exports and ongoing property sector woes.”
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“The economy is still slowly recovering from a widespread outbreak of Covid-19 in the first half of the year. Yet, local flare-ups and the punishing heatwave have disrupted the trend and created new downward pressures, posing a threat to the recovery,” said Wang Zhe, senior economist at Caixin Insight Group.
Demand remained bleak, with subindices of new orders and new export orders returning to contraction following two months of expansion.