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
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.
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