CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.

China’s Caixin Manufacturing PMI dips to 14-month low

China's Purchasing Manager’s Index (PMI) dropped to 50.6 in August 2018, recording the weakest since June 201, the Caixin survey finds.

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
China
Source: Bloomberg

Contrary to the Caixin survey, China’s official manufacturing PMI showed an improvement, climbing to 51.3 from 51.2.

The official manufacturing PMI surveys larger, state-owned enterprises, in contrast to the Caixin survey, which focuses on smaller and private companies.

The Caixin manufacturing survey showed new orders rose at the slowest rate since May 2017, while exports declined for the fifth consecutive month. Confidence has continued steady near June's six-month low, affected by on-going China-US trade wars, relatively subdued market conditions.

CEMB Director of Macroeconomic Analysis, Zhengsheng Zhong said the manufacturing sector continued to weaken, despite soft demand, and stable supply.

‘I don’t think that stable supply can be sustained amid weak demand. In addition, the worsening employment situation is likely to have an impact on consumption growth.

China’s economy is now facing relatively obvious downward pressure.’  Mr Zhong said.

Employment continued a downward trend, which contributed to an increase in outstanding workloads.

‘The employment subindex, remaining in contractionary territory, dipped to its lowest level since July 2017.

The subindex for new export orders inched up despite remaining in contractionary territory, implying a still-grim export situation.” Said Mr Zhong.

Manufacturing production increased during August at the fastest rate since January. However, total new business has risen at the slowest pace for 15 months.

Future production remained relatively quiet in August, with little-change from June’s recent low.

Positive forecasts are generally linked to expectations of rising client demand the survey finds, concluding a growing concern over the ongoing China-US trade war.

 

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.  Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. 

CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Find articles by analysts