China: Manufacturing PMI in negative territory for fourth consecutive month in August
August 31, 2019
The manufacturing Purchasing Managers’ Index (PMI) published by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP) decreased to 49.5% in August from July’s 49.7%. The print narrowly missed the 49.6% result expected by market analysts. Therefore, the index remained below the 50.0% threshold that separates contraction from expansion in the manufacturing sector for the fourth month in a row.
The deterioration in August was due to lower sub-indices for production, new orders, employment and raw material inventories. As production lines became slightly less busy in August, supplier delivery times increased slightly in the month. Against a backdrop of escalating trade tensions between China and the United States, export orders remained below the 50.0% threshold for the 15th consecutive month. Moreover, input prices—a reliable leading indicator for inflation—declined in August, likely reflecting the recent drop in prices for some key commodities, such as oil.
Author: Edward Gardner, Economist