PMI in Chinease manufacturing sector increased, but production activity continues declining

Expectations of an economic recovery in China weren’t fulfilled, as the main official indicator of production activity continues its decline in August. Due to new outbreaks of coronavirus infection within the country and abnormal temperature values resulted in a drought and several blackouts, the productivity of Chinese factories was disrupted.

According to the information received on Wednesday from China’s National Bureau of Statistics, there was an increase in the manufacturing PMI (Purchasing Managers’ Index), which has risen since June and reached the level of 49.4. This value is higher than the median meaning of 49.2, which was expected by economists from a Wall Street Journal poll.

It’s worth noting that a value of less than 50 indicates decreasing activity, while a value above said level means an expanding activity.

There was also additional data on other economic indicators, with one of the most notable features being a subindex reflecting export orders. It has been falling for more than a year already, which correlates with an overall economic weakening and a subsequent decline in demand for Chinese products in other countries. The subindex which tracks down factory production remained on the same level it had reached below, which is 49.8.

The total number of new orders is reflected by a specific subindex as well, which value has increased during the last month in comparison with its previous value of 48.5, and reached the level of 49.2.