Data released by Caixin/S&P Global showed that business activity in China's manufacturing sector unexpectedly expanded last month, as new orders returned to growth.
According to the report, the manufacturing PMI rose to 50.4 from 49.8 in July. Economists had expected an increase to 50.0 points. A value above 50 points indicates an expansion of activity in the sector.
Manufacturing production expanded again in August (for the 10th month in a row), accelerating compared to July, mainly driven by growth in the consumer and intermediate goods sectors. Incoming new orders returned to growth, while export orders fell slightly (for the first time since the beginning of the year) amid reports of deteriorating external conditions. Meanwhile, the improvement in overall demand led to a stabilization of staffing levels following an 11-month period of decline. The data also showed that backlogged orders rose for a sixth straight month. As for the inflationary situation, average input costs are falling fractionally for the first time in five months. In turn, selling prices also declined in August. Overall confidence levels rose to a 3-month high in August. Firms grew more optimistic that improvements in economic conditions and business development efforts will bear fruit in the year ahead.