China: Manufacturing PMI rebounds vigorously in August

The Purchasing Managers’ Index (PMI) jumped from 49.9% in July to 50.4% in August, according to the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP), which publish the index. The increase exceeded the 49.8% reading that market analysts had expected and hit a 22-month high. The PMI is now sitting just above the 50% threshold that separates expansion from contraction in the manufacturing sector.

August’s reading reflected strong gains across the board. New orders and production expanded at sizeably faster rates. Employment hit a 17-month high, though the sub-index remained in negative territory. Input prices—a reliable leading indicator for producer prices—increased markedly in August, suggesting that deflationary forces are gradually abating. Despite remaining in the red, new exports hit a three-month high.