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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
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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 Caixin/Markit manufacturing purchasing managers’ index (PMI) slid to 49.5 in August from 50.4 in July, missing analysts’ expectation for 50.2.
The unexpectedly weak reading echoed China’s official PMI released on Wednesday, which was also below the 50-point mark that separates growth from contraction on a monthly basis.
“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.”
03:44
First Covid, now historic heatwave hits farmers in southwest China hard
First Covid, now historic heatwave hits farmers in southwest China hard
While factory production expanded in August, gains were marginal, reflecting subdued demand due to the sluggish real estate sector, virus control restrictions and power rationing in southwestern regions due to extreme heat and drought.
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