China’s manufacturing activity contracted for the fifth consecutive month
The main data on economic activity in China’s manufacturing sectors have been below the growth threshold for 5 months.
Although the Purchasing Managers’ Index (PMI) for manufacturing, announced by China’s National Bureau of Statistics (UIB), rose 0.4 points to 49.7 in August from the previous month, it could not break above the contraction threshold.
The manufacturing PMI had slipped back below the growth threshold starting in the second quarter after rising in the first three months of 2023, when signs of a post-Covid-19 recovery were seen.
VULNERABILITY IN RECOVERY CONTINUES
While the manufacturing new orders sub-index increased from 49.5 to 50.2 percent, indicating the direction of expansion, the export new orders sub-index increased from 46.3 to 46.7 percent. , but remained in the contraction zone.
Although the business expectations sub-index, which is accepted as an indicator of market confidence, increased from 55.1 to 55.6, the weak momentum in the manufacturing sector indicates that the vulnerability of China’s recovery after the Covid-19 epidemic , whose economy is largely based on this sector, continues.
NON-MANUFACTURER PMI
Elsewhere, the non-manufacturing PMI fell 0.5 points to 51, although it remained above the growth threshold. The index has been showing a downward trend for the last 5 months.
In the non-manufacturing sectors, the services sub-index decreased from 51.5 to 50.5, while the construction sub-index increased from 51.2 to 53.8.
Values above 50 in the PMI indices indicate an increase in economic activities and values below indicate a decrease.
After the Covid-19 restrictions, which hampered economic activities in China, were lifted in December 2022, signs of recovery in the economy were observed with the new year.
The PMI manufacturing and non-manufacturing indices have been above the growth threshold since January, and the country’s economy grew 2.2 percent in the first quarter compared with the last quarter of last year.
In the second quarter, gross domestic product rose 0.8 percent compared with the first quarter, below expectations. (AA)