HSBC’s final August China manufacturing PMI came in light at 50.2.
Expectations were for the reading to come in at 50.3, unchanged from the “flash” reading reported earlier this month.
This is also lower than 51.7 report in July, which was an 18-month high.
A reading above 50 indicates expansion in the economy, while a reading under 50 would indicate contraction.
Following the report, Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said: “The HSBC China Manufacturing PMI eased slightly to 50.2 in the final reading for August from the flash reading of 50.3. The revisions were mixed, with upward revision to the new export orders and output sub-indices but downward revisions to the employment and input prices indices. Although external demand showed improvement, domestic demand looked more subdued. Overall, the manufacturing sector still expanded in August, but at a slower pace compared to previous months. We think the economy still faces considerable downside risks to growth in the second half of the year, which warrant further policy easing to ensure a steady growth recovery.”
HSBC’s manufacturing reading on China also follows official data released by China’s National Bureau of Statistics earlier this evening, which showed that manufacturing slowed in August to 51.1. The official state reading was also slightly below the 51.2 expected by economists.
Dariusz Kowalczyk at Credit Agricole said ahead of the report that, “The data will highlight renewed downward pressure on the Chinese economy emerging in the summer, but it should also prompt more policy easing measures from Beijing, and is therefore going to have only a limited negative impact on market sentiment.”
This chart from Markit/HSBC shows the last decade of PMI, which has wobbled on either side of 50 for the last several years.
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