Chinese manufacturing PMI for August has just been released, and it’s a shocker.
The government’s official gauge fell to 49.7 from 50.0 in July. The reading marked the fastest pace of contraction since August 2012, and was in line with market expectations.
A PMI reading below 50 points to declining levels of activity.
Breaking down the survey, new orders fell to 49.7 from 49.9 with new export orders — a harbinger for global demand — sliding to 47.7 from 47.9. The latter has now contracted for the past 11 months.
As a result of the slowdown in factory activity, employers shed staff numbers at a faster pace with the employment subindex slipping to 47.9 from 48.0 in July.
In the separate Caixin-Markit PMI report, a survey of manufacturing conditions for small and midsize Chinese firms, activity contracted at an even faster pace.
The gauge fell to 47.3 in August, the sharpest contraction seen since March 2009 — the depths of the global financial crisis.
While largely inconsequential given it remains deep in contractionary territory, the figure was a slight improvement on the flash estimate of 47.1 released two weeks earlier.
Alongside the manufacturing gauges, the NBS also reported that the expansion in nonmanufacturing sectors cooled in August.
The nonmanufacturing PMI reading fell to 53.4 from 53.9 in July.
While activity continued to expand, it is modest compared to levels seen in previous years.
