Pick­ing up speed

Fac­to­ries grow at fastest pace in two years

China Daily (USA) - - FRONT PAGE - By WANG YIQING wangy­iqing@chi­nadaily.com.cn

China’s of­fi­cial Pur­chas­ing Man­agers In­dex for man­u­fac­tur­ing re­turned to ex­pan­sion­ary ter­ri­tory in Au­gust, hit­ting its high­est point since Novem­ber 2014, in­di­cat­ing solid eco­nomic re­cov­ery.

The PMI in Au­gust reg­is­tered at 50.4, com­pared with 49.9 in July and 49.7 a year ago, the Na­tional Bureau of Sta­tis­tics said on Thurs­day.

The in­dex is a lead­ing gauge of man­u­fac­tur­ing ac­tiv­ity. A read­ing above 50 in­di­cates ex­pan­sion in the man­u­fac­tur­ing sec­tor while be­low 50 means con­trac­tion.

Zhao Qinghe, se­nior statis­ti­cian at the NBS, said that the data in­di­cates re­cov­ery in pro­duc­tion and de­mand as well as a fur­ther op­ti­mized eco­nomic struc­ture.

Among the PMI five sub-in­dexes, the pro­duc­tion, new or­ders and em­ploy­ment subindexes all rose from the pre­vi­ous month.

The pro­duc­tion subindex reached a high this year of 52.6, com­pared with 52.1 in July. The new or­der subindex rose to 51.3 in Au­gust from 50.4 in July.

But Zhao also noted that China’s man­u­fac­tur­ing sec­tor still faces pres­sure from the down­turn in ex­ports, as the subindex of new ex­port or­ders was 49.7 in Au­gust, up from 49.0 in July.

Ac­cord­ing to Zhang Yip­ing, econ­o­mist of China Mer­chants Se­cu­ri­ties, the re­cov­ery in de­mand is the main fac­tor con­tribut­ing to the re­bound.

“The de­mand may mostly be a re­sult of con­sump­tion up­grades,” Zhang said.

The PMI of the high-tech man­u­fac­tur­ing in­dus­try was 52.6 and the PMI of the con­sumer goods man­u­fac­tur­ing in­dus­try was 51.2 in Au­gust.

The of­fi­cial PMI “shows that the growth mo­men­tum of the Chi­nese econ­omy is im­prov­ing, which will turn weak mar­ket con­fi­dence around,” said Zhou Hao, a se­nior econ­o­mist at Com­merzbank.

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