(Yicai Global) Sept. 1 -- A widely watched private survey showed a contraction in China’s manufacturing activity in August for the first time in 15 months.
The Caixin purchasing managers’ index for manufacturing fell to 49.2 last month amid severe flooding and a renewed Covid-19 outbreaks, from 50.2 in July, according to data released today by financial media group Caixin. A mark above 50 indicates expansion.
The data echoed China’s official manufacturing PMI released by the National Bureau of Statistics yesterday, which stood at 50.1 in August, down from 50.4 the month before. The NBS figure was the lowest since March last year, but still just above the expansion threshold.
Supply and demand in the manufacturing sector both dropped last month amid coronavirus outbreaks and flooding. The Caixin manufacturing production index fell below the threshold for the first time since March last year, with the new order index also dropping below 50.
China’s manufacturing sector is still optimistic about the next year, with output expected to grow as the global pandemic is brought under control. But some companies are worried about uncertainties over the impact from the coronavirus on their supply chains, given that no-one knows for sure when the pandemic will end.
Outbreaks in late July were the biggest challenge to China’s economy since it gradually returned to normal in the second quarter of last year, said Wang Zhe, a senior economist with Caixin’s think tank. The outbreaks caused manufacturing prosperity to decline and market supply to drop, while also boosting inflationary pressures and hitting demand and the jobs market, he added.
The downward pressure on the economy is still considerable, Wang said, adding that plans are needed to improve pandemic control and prevention measures, and to stabilize supply, the jobs market and commodity prices.
Editor: Tom Litting