China’s Factory Activity Contracts in August Despite an Uptick in Export Demand
- On Monday, August 31, China's official manufacturing PMI rose to 49.8 from 49.2 in July, according to the National Bureau, though factory activity remained in contraction for a second consecutive month.
- Economic growth slowed to 4.3% in the second quarter, the weakest pace since late 2022, as soft domestic demand and a prolonged property slump continue to weigh on activity.
- Monday's reading outperformed the 49.6 forecast from Reuters-polled economists, yet retail sales and industrial output both slowed in July, with industrial profit growth cooling to its weakest pace this year.
- Exports remain a key pillar propping up growth, recording double-digit increases for most of the year as a global boom in AI infrastructure spending lifts demand for Chinese-made tech goods.
- Chinese policymakers have pledged to roll out new measures, flagging room for further fiscal spending and monetary easing, though economists warn the scale of any upcoming support will likely be limited.
43 Articles
43 Articles
Manufacturing PMI figures improve in August
The purchasing managers' index (PMI) for China's manufacturing sector improved in August, raising 0.6 percentage points from the month before to 49.8, according to figures from the National Bureau of Statistics. The composite PMI output index rose from 49.3 to 49.5. Several PMI sub-indexes returned to expansion in August. The sub-index on production advanced to 50.4, from 49.9 in July. The new orders sub-index recovered to 50.6 from 48.5, while…
China trade portfolio: Factory activity contracts in August despite stronger export demand
China's manufacturing sector showed stability in August, as improvements in new orders and production were noted. Exports surged, aided by stronger demand for high-tech items and electric vehicles, especially from Europe and Southeast Asia. However, domestic demand still struggles amid challenges in the real estate sector. Looking ahead, significant trade discussions between leaders are anticipated toward the end of September, hinting at potenti…
The manufacturing sector has been facing significant uncertainties for several months, particularly as a result of the conflict in the Middle East, which has led to an increase in energy costs.
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