China’s Manufacturing PMI Cools Down to 49.2 in August on Covid-19 Resurgence Fears

Source: IHS Markit.

China’s manufacturers signaled a slight decline in business conditions in August, backed by a new drop in the output and a further decline in new work. CSI 300 Index up +1.33%,  CNY USD down -0.10% 

• The headline seasonally adjusted PMI in August was 49.2, down from 50.3 in July to signal a deterioration in the health of the sector.
• Chinese goods producers recorded the first fall in output since February 2020 in August. 
• The recent uptick in COVID-19 cases and subsequent restrictions had dampened production.
• Dr. Wang Zhe, Senior Economist at Caixin Insight Group, commented that The Caixin China General Manufacturing PMI fell into contractionary territory following the reappearance of Covid-19 clusters in numerous regions in late July.  
• The world’s second-largest economy’s manufacturing companies recorded a fractional fall in employment during August after payrolls remained unchanged in July.
• Supplier performance worsened again in August, with lead times increasing to the greatest degree since February, as firms reported logistical delays due to the pandemic.