Yesterday we got the official PMIs from China, now it's the private survey

Comes in at 51.6, a huge beat and a 6 month high

  • expected 51.0, prior 51.1

"Key Points"

  • Stronger rise in total new work supported by quickest increase in export sales since early 2010
  • Production levels continue to expand
  • Inflationary pressures intensify

More:

  • strongest increase in new business for just over three years
  • Firmer foreign demand was a key driver of new order growth
  • Export sales rising to the greatest extent in over seven years in August
  • Companies expanded their production schedules and buying activity
  • Business confidence rose to its highest for five months
  • However, stricter environmental policies were a key factor leading to longer delivery times, whilst inflationary pressures intensified as input costs and output charges both rose at faster rates
  • new work placed at Chinese manufacturers ... rate of expansion the quickest seen for 37 months
  • sharpest increase in export sales since March 2010
  • Sustained growth in new orders led firms to expand their production schedules again in August
  • Staff numbers continued on a downward trend in August, though the rate of job shedding softened since July
  • Average input costs rose to the greatest extent in five months in August. Survey respondents widely commented on higher prices for a broad range of raw materials in the latest survey period. Consequently, output prices rose at a solid pace that was the fastest in 2017 to date

Commenting ... Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said:

  • "The Caixin China General Manufacturing PMI rose 0.5 points to 51.6 in August, the second-highest reading of this year so far. It was also the third consecutive month that the index had posted in expansionary territory.
  • Among the sub-indices: the output index dropped slightly but new orders continued growing. Both input costs and output prices rose further, with the latter hitting an eight month high.
  • Inventories of finished goods dropped further and at a faster pace, but stockpiles of procured goods continued expanding in August.
  • Overall operating conditions of the manufacturing sector improved further as market demand strengthens, but if prices rise too quickly the profitability of companies in the middle of a supply chain may be under pressure."

--

So, a very strong report, confirming the rise in the official manufacturing PMI seen in yesterday's data

--

The official PMIs here:

As noted earlier:

  • The official PMI and Caixin PMI are different surveys, of different firms, with different characteristics, so they often have diverging results. In brief, the Caixin/Markit surveys smaller firms than does the official survey from China's National Bureau of Statistics/China Logistics Information Center.

Oh, while you're down here, the Caixin / Markit 'services' PMI is due next week, Tuesday 5 September 2017 at 0145GMT