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

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.