China’s manufacturing activity contracted again during the month of August, as reflected by the PMI manufacturing index, which stood at 49.7 points from 49.3 the previous month, thus accumulating five consecutive months below the stability threshold of 50 points, according to data published this Friday by the National Statistics Office (ONE).

Despite a new contraction in activity in August, trends point to a slight improvement in the sector, underpinned by the recovery observed in the production sub-index, which was 51.9%, with an increase of 1.7 percentage points compared to the previous month, which indicates that the expansion of manufacturing production has increased.

Likewise, the data for new orders has also improved in August, with a reading of 50.2%, compared to 49.5% in July, suggesting an improvement in demand, while the employment sub-index was 48%, a slight decrease of 0.1 percentage points from the previous month, indicating that the employment boom in manufacturing companies is basically stable.

As for the non-manufacturing sector, the PMI for August has reduced its expansion to 51 points from 51.5 in July, its worst reading since December 2022.

In this sense, the data for new orders was 47.5%, compared to 48.1% the previous month, which indicates that the demand in the non-manufacturing market has decreased.

By sectors, construction new orders moderated their decline to 48.5% from 46.3% the previous month, while the services industry new orders PMI was 47.4%, a decrease of 1 percentage point compared to July.

Source: dpa

(Reference image source: Extend, dpa)

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The deterioration in factory activity in the eurozone worsened in March, when the purchasing managers’ index (PMI) fell to 47.3 points from 48.5 the previous month, its worst reading in four months, according to S&P Global. Market Intelligence.

Among the countries analyzed, the best manufacturing activity data in March were registered in Greece and Spain, with 52.8 and 51.3 points, respectively, while Germany (44.7) and France (47.3) recorded their worst readings at 34 and 5 months, respectively.

“The eurozone manufacturing sector continues to struggle, with factories reporting a drop in product demand for the 11th consecutive month, due to rising cost of living, tighter monetary policy, a turnaround towards destocking and subdued customer confidence,” said Chris Williamson, chief economist at S&P Global Market Intelligence.

In March, the companies surveyed commented that the improvement in the availability of materials, together with the drop in demand for inputs, led to a drop in supplier prices, which, together with lower energy costs, resulted in the first decline in the average prices paid by the manufacturing sector in almost three years in March.

However, the prices charged continued to rise, albeit at the slowest pace in the last 26 months.

“The lack of demand has resulted in a major shift in pricing power, shifting from seller to buyer,” Chris Williamson said.

Source: dpa

(Reference image source: Europa Press, dpa) 

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