China’s manufacturing industry grows for 6th straight month in August
Beijing, Aug 31 (efe-epa).- China’s Purchasing Manager Index (PMI), an indicator of the economic health for manufacturing and service sectors, stood at 51 points in August, extending its growth streak for the sixth consecutive month, according to official data released on Monday.
The figure is 0.1 percentage points lower than July and slightly lower than expectations of analysts, predicting a PMI of 51.2 points for this month.
An index reading above 50 signifies expansion.
The figure, released by the country’s National Bureau of Statistics (NBS), confirms the recovery of the sector since the indicator avoided contraction for the sixth consecutive month after plummeting to 35.7 points in February due to a halt in economic activities in the country due to the coronavirus.
In February, the coronavirus crisis caused a decline in manufacturing even greater than the 38.8 points it recorded in November 2008, during the global economic crisis.
In a breakdown by size, the indicator for large firms remained unchanged from July at 52 while for medium ones it grew by 0.4 percentage points to 51.6, and for small ones it declined by 0.9 points to 47.7.
Three of the five sub-indices that make up the manufacturing PMI were above the 50-point threshold: the sub-index for production at 53.5 points, that of new orders at 52, and of supplier delivery times at 50.4.
However, the sub-index for employment, despite rising marginally by 0.1 points, remained at 49.4 and that of the provision of raw materials stood at 47.3.
The PMI for businesses not related to manufacturing was 55.2 points in August, the highest level since January 2018 of the indicator, which fell to a dismal 29.6 in February.
The services sector, which represents more than half of the country’s gross domestic product, stood at 54.3 in August as compared to 53.1 points in July and 53.4 and 52.3 in June and May respectively.
The NBS indicated that, in the breakdown of these businesses, only the sales price index remained in the growth zone for the second consecutive month with 50.1 points.
The index of expected economic activity, which measures the confidence of non-manufacturing companies in future market development, declined slightly by 0.1 points to 62.1.
The comprehensive PMI production index, combining manufacturing and non-manufacturing industries, stood at 54.5 points in August as compared to 54.1 in July.
NBS statistician Zhao Qinghe said in a statement on Monday that demand was continuing to recover and the supply-demand cycle was gradually improving.
However, he added that heavy rains and floods had led to a delay in the supply of raw materials and a reduction in orders and production of some (small) enterprises in (the central provinces of) Chongqing, Sichuan, among others.
According to the analysts of the British consultancy firm Capital Economics, the latest data “showed that the pace of economic growth picked up in August as stronger services activity more than offset a slight loss of momentum in manufacturing and construction sector.”
“This is consistent with our view that an investment-led rebound would eventually also shore up consumer sentiment and household spending, keeping the overall economic recovery on track,” it added. EFE-EPA