China’s manufacturing PMI rises to six-month high in August | Manufacturing Asia
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China’s manufacturing PMI rises to six-month high in August

New orders from abroad continued to lag.

The overall health of China’s manufacturing sector rebounded in August to its strongest showing in six months with local demand seen doing the heavy lifting, a recent industry survey showed.

The Caixin China general manufacturing purchasing managers' index (PMI) went up to 51 last month from 49.2 in July, signalling renewed improvement in the sector with the level of growth reaching its highest since the 51.6 reading in February.

A PMI above 50.0 indicates improvement in the operating conditions of the sector while anything below that signals deterioration.

The survey, compiled by S&P Global, showed new orders for China's manufactured goods picked up in August after robust demand from domestic clients more than offset the continued slump in export sales.

Increasing sales prompted Chinese factories to ramp up their purchasing activity and stock up on supplies. Firms also reported higher staffing levels with the rate of job creation reaching its highest level since March 2010.

READ MORE: China’s manufacturing activity shrinks in July

For the next 12 months, the survey showed Chinese manufacturers remained optimistic that output will continue to increase amid improving global economic conditions and product launches. The level of confidence, however, dipped to its lowest in 11 months.

“Looking ahead, seasonal impacts will gradually subside, but the problem of insufficient internal demand and weak expectations may form a vicious cycle for a longer period of time,” said Wang Zhe, senior economist at Caixin Insight Group. “Combined with the uncertainty in external demand, the downward pressure on the economy may continue to increase.”

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