China Caixin Manufacturing PMI Signals Improvement as New Orders Return to Growth
A private gauge of China's manufacturing activity returned to growth in August, contrasting with the official reading to paint a mixed picture of the sector.
The Caixin manufacturing purchasing managers index rose to 50.4 in August compared with 49.8 in July, according to data released Monday by Caixin Media Co. and S&P Global.
That contrasted with official data showing a decline to 49.1 in August from 49.4 in July, reaching a six-month low that marked a fourth consecutive month below the 50-point threshold separating expansion from contraction.
Compared to the official gauge, the Caixin manufacturing PMI tracks small, export-oriented companies more closely.
The improvement in the private gauge could be a sign of the resilience of smaller manufacturers in China.
Factory production rose for a tenth consecutive month in August, thanks to expansion in the consumer and intermediate goods sectors, said Caixin.
Demand also picked up, with total new orders returning to growth while export orders fell for the first time in eight months.
On the back of improving output and demand, employment stabilized in August after an 11-month contraction, said Caixin.
Surveyed businesses expressed confidence in the 12-month market outlook, but limited optimism towards future output expectations.
Key issues such as insufficient domestic demand persist, said Wang Zhe, a senior economist at Caixin Insight Group.
Recent data on industrial production, consumption, and investment showed that although the economy has continued the trend of stabilization, it is significantly weaker than market expectations, said Wang.
"There is an increasingly urgent need for China to enhance policy support and ensure the effective implementation of earlier policies."
Write to Singapore editors at singaporeeditors@dowjones.com
(END) Dow Jones Newswires
September 01, 2024 22:35 ET (02:35 GMT)
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