China’s factory activity indicates that the downshift of the second-largest economy in the world may not yet have seen its lowest point.
According to a report from the National Bureau of Statistics released on Thursday, “Earlier in August, the index of official manufacturing purchasing managers slightly increased to 49.7, from 49.3 of its previous month.”
Which was estimated to be better than the median evaluation of 49.4 in a Reuters poll.
A PMI rating above 50, on the other hand, suggests a growth in activity, while a reading below that level indicates a withering.
Zhao Qinghe, a senior NBS statistician, said in a statement that “The survey results show that insufficient market demand is still the main problem that enterprises are facing, and the foundation for the recovery and development of the manufacturing industry needs to be further consolidated.”
While there were some indications of life in China’s manufacturing PMI sub-indices, with 4/5 recording expansion, the non-manufacturing PMI, which encompasses the service sectors, declined to 51.0 in August, 51.5 in July, and 53.2 in June.
Additionally, there have been growing concerns that the Chinese economy may not meet Beijing’s growth target stated to be 5% this year, amid an inflammation crisis of confidence in the nation’s property sector that’s plagued by credit briefs and weak sales.
Beijing has also taken a more targeted strategy to help the economy, ranging from steps to increase lending and stock investment to more tangible measures to increase home demand.
Indicating the unusual recovery in the Chinese economy, a data release exhibited manufacturing-related sub-indexes for production and new orders hitting five-month highs on Thursday, while the new orders sub-index for China’s non-manufacturing sectors downshifted to 47.6.
Moreover, the new order index for the fabrication industry is 48.5, an increase from the previous month when construction work was hampered by extreme weather. In addition, the new order index of the service industry was 47.4, which is evaluated to be a dip of 1.0 percentage points from last month.
Also, in August, input prices for both manufacturing and non-manufacturing sectors increased, which ultimately translated to higher output prices, suggesting inflationary pressures that might rebound. Although recent data indicate disinflationary or deflationary trends.
- Published By Team Genuine Reporter