China’s factory activity softer in August: Caixin
BEIJING–Activity in China’s factories expanded at a slower rate in August, a private gauge indicated, in contrast with official data that showed a slight improvement in manufacturing activity.
The Caixin China manufacturing purchasing managers’ index declined to 50.6 in August from 50.8 in July, Caixin Media Co. and research firm Markit said Monday. The reading was the lowest level since June 2017, though it still remains above the 50 mark that separates an expansion in manufacturing activity from a contraction.
The subindex of production continued to expand and at a quicker pace than in July, said Caixin. But new orders rose at the slowest rate since May 2017 as export sales declined for fifth month in a row, it said.
"Generally speaking, the manufacturing sector continued to weaken amid soft demand, even though the supply side was still stable," said Zhengsheng Zhong, an economist at CEBM Group, in a statement accompanying Monday’s release.
He said prices of industrial products were underpinned by Chinese government’s proactive fiscal policy and environmental protection policies that had limited some factory production. But such trend can hardly sustain amid weak demand, Mr. Zhong said.
"In addition, the worsening employment situation is likely to have an impact on consumption growth. China’s economy is now facing relatively obvious downward pressure," said Mr. Zhong.
China’s official manufacturing PMI edged up to 51.3 in August from July’s 51.2, according to data released by the National Bureau of Statistics last week.
The Caixin China Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives at more than 400 manufacturing companies.
Compared with the official gauge’s coverage of firms including large state-owned companies, the Caixin PMI tends to track small, private manufacturers more closely.
Write to Grace Zhu at [email protected]
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