China: PMI retreats slightly in August
September 1, 2014
The Purchasing Managers’ Index (PMI) declined from 51.7 points in July to 51.1 points in August, according to the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP), which publish the index. August’s print slightly undershot the 51.2 points that market analysts had expected. That said, the PMI is still above the 50-point threshold that separates expansion from contraction in the manufacturing sector, where it has idled since September 2012.
August’s reading reflected a broad-based deterioration in all the sub-categories of the index, with new orders and manufacturing output recording the largest monthly losses. In addition, new exports orders fell to the lowest level in three months, while input prices—a reliable leading indicator for consumer prices—hit a four-month high in August.
August’s reading points to weaker growth momentum, as the effect of the government’s mini stimulus implemented in the first quarter has started to fade. In addition, July’s relatively tighter monetary and credit growth have also played a role in the weak PMI outturn.