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22 Aug 2013

China begins to recover

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China’s manufacturing industry stabilised in August with the help of new orders, according to the HSBC Flash China Manufacturing Purchasing Managers’ Index™.

The headline figure rose to a four-month high of 50.1, from 47.7 in July.

China’s manufacturing growth has started to stabilise on the back of modest improvements of new business and output

Qu Hongbin,
Chief Economist for Greater China, HSBC

Businesses reported that output and new orders had started to rise, and the backlog of work increased. There was also a rise in the purchases of raw materials. However, new export orders fell at a faster rate and employment dropped, though at a slower rate. Output and supply prices both increased.

The Flash PMI™ is based on a survey of purchasing executives in Chinese companies. An index figure above 50 signals expansion, while below 50 signals contraction.

Qu Hongbin, Chief Economist for Greater China and Co-Head of Asian Economic Research at HSBC, said: “China’s manufacturing growth has started to stabilise on the back of modest improvements of new business and output. This is mainly driven by the initial filtering through of recent fine-tuning measures and companies’ restocking activities, despite the continuous external weakness. We expect further filtering through, which is likely to deliver some upside surprises to China’s growth in the coming months.”

The Flash China Manufacturing Output Index was also positive, rising to a three-month high of 50.6, up from 48.0 in July.

The August China PMI™ is due for release on 2 September.

The intellectual property rights to the HSBC Flash China Manufacturing PMI™ provided herein is owned by Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit's prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information ("data") contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index™ and PMI™ are trade marks of Markit Economics Limited, HSBC use the above marks under license. Markit and the Markit logo are registered trade marks of Markit Group Limited.

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