(Bloomberg) — A gauge of China’s manufacturing activity declined slightly in August, fueling concerns that the pace of China’s economic recovery may have peaked.
- The official manufacturing purchasing managers’ index moderated to 51 from 51.1 a month earlier, lower than the 51.2 median estimate of economists, data released by the National Bureau of Statistics showed Monday.
- The non-manufacturing gauge rose to 55.2 from July’s 54.2, much stronger than the projected 54.2. A reading above 50 indicates improving conditions.
- China’s economy continued to recover from the slump in the first quarter, with government-led investment boosting demand and reopening of overseas economies buoying the export sector.
- Heavy flooding in central and southern China temporarily disrupted some transport and production activities, but hasn’t had a major impact on the economy.
- Services industries are picking up as the government eases virus control measures, with more sub-sectors such as cinemas reopened for business.
- “As the impact of flooding subsided, production should continue to recover,” Citi economists led by Johanna Chua wrote in a report before the data was released. “New export orders may remain resilient, benefiting from the reopening of major trading partners.”
- A sub-index of new export orders for factories rose to 49.1, and new orders also increased to 52.
- A sub-index of manufacturing employment trended higher to 49.4 from 49.3.
- A set of early indicators suggested China’s economy picked up speed in August, aided by a strong industrial sector and stock market, better business confidence and home and car sales.
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