Explainer | China’s ‘economic momentum is still weak’: 4 takeaways from August’s manufacturing, services activity data
- Both China’s official manufacturing purchasing managers’ index (PMI) and the Caixin/S&P Global manufacturing PMI rose in August, remaining in expansion
- China’s non-manufacturing PMI and Caixin/S&P Global services PMI also remained in expansion in August, but both gauges fell last month
1. Downward pressure on factory activity ‘dissipating’
Within the official manufacturing PMI, the new-orders subindex jumped into expansionary territory as it reached 50.2, up from 49.5 a month earlier, while the new-export-orders subindex remained low at 46.7 in August, up slightly from 46.3 in July.
“This appears to reflect an improvement in domestic demand as the new orders component rose and is now above 50. Downward pressure on foreign demand eased as well the export orders component edged up. But it remains under 50 and continues to point to a further drop in exports,” said analysts at Capital Economics.
“The Caixin manufacturing PMI rose by a larger clip compared with the official manufacturing index in August,” added analysts at Capital Economics. “Taken together, the average of the two is consistent with downward pressure on factory activity dissipating last month.