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China’s manufacturing industry returned to growth in August after stronger domestic demand, according to the HSBC China Manufacturing Purchasing Managers’ Index™. The headline figure of 50.1, which was unchanged from the Flash PMI™, was up from an 11-month low of 47.7 in July. 

Manufacturers signalled the first expansion of output in three months amid signs of improved market conditions. New export orders declined at a marked pace, with weak demand in Europe and the US, but this was more than offset by strengthening domestic demand.  Higher volumes of new orders led to increasing backlogs of work.

Growth in China’s manufacturing sector has started to stabilise on the back of a modest rebound of new orders and output

Qu Hongbin,
Chief Economist for Greater China, HSBC

Employment levels fell for the fifth month in a row, though the rate of reduction was marginal. Average input costs increased, leading manufacturers to raise output charges for the first time in six months.

Qu Hongbin, Chief Economist for Greater China, said: “The final reading of August’s HSBC China Manufacturing PMI™ recovered to 50.1, from an 11-month low of 47.7 in July. This implies that growth in China’s manufacturing sector has started to stabilise on the back of a modest rebound of new orders and output. This was mainly driven by the initial filtering through of recent stimulus measures and companies’ restocking activities.  We expect some upside surprises to China’s growth in the coming months.”

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

September’s Flash PMI™ is due for release on 23 September.

The intellectual property rights to the HSBC 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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