Caixin/Markit Manufacturing PMI for August comes in stronger than expected and up from July at 53.1, 4th consecutive month in expansion
- expected 52.5, prior 52.8
Highest since January of 2011
- New export orders a notable improvement, first growth for this year
- Sharpest increases in output and new orders since the start of 2011
- Employment moves closer to stabilisation
Dr. Wang Zhe, Senior Economist at Caixin Insight Group (this in summary):
- overseas demand started to pick up
- new export orders entered expansionary territory for the first time this year, due mainly to the slowing spread of the pandemic overseas
- Companies were willing to replenish their stocks as demand continued to expand
- Employment remained subdued ... employment subindex stayed in negative territory for the eighth consecutive month, but it was the closest to positive territory this year
- backlogs of work expanded at a faster pace than the previous month, which could be seen as a positive signal that a turning point is approaching for employment. Input costs and output prices both rose, albeit at a slower pace
"Overall, the post-epidemic economic recovery in the manufacturing sector continued. Supply and demand expanded with the pickup in overseas demand. Backlogs of work continued to increase. Both quantity of purchases and stocks of purchased items also grew. Companies' future output expectations remained strong, reflecting a positive outlook for the manufacturing sector for the year ahead. Employment remained an important focus. An expansion of employment relies on long-term improvement in the economy. Macroeconomic policy supports are essential, especially when there are still many uncertainties in domestic and overseas economies. Relevant policies should not be significantly tightened."
