Chinese factory output rises with export orders - Caixin
By Sean Farrell
Date: Tuesday 01 Sep 2020
(Sharecast News) - Chinese factory activity rose at its fastest pace for almost a decade in August as export orders increased for the first time this year, a private sector survey showed.
The Caixin/Markit manufacturing purchasing managers' index (PMI) rose to 53.1 from 52.8 a month earlier, beating the consensus forecast of 52.6. A reading of 50 separates growth from expansion.
The reading was the fourth straight month of manufacturing growth and the sector's biggest expansion since January 2011. Factories in the world's second-biggest economy reported the first rise in new export orders of 2020 as overseas markets unlocked their economies, leading to a big gain in Chinese production.
The survey was slightly out of sync with an official report that showed manufacturing growth easing because of floods in southwest China. But the official PMI showed a similar trend in new export orders to the Caixin/Markit survey and also recorded growth in the services sector.
Jeffrey Halley, senior market analysts for Asia Pacific at OANDA said: "China's Caixin manufacturing PMI for August again impressively outperformed. The result was more pleasing as the official manufacturing PMI yesterday stalled, even as services surged. The net result between the two releases suggests that China is firing on nearly all its cylinders."
The Caixin/Markit survey also showed the labour market picking up. The employment gauge was negative overall but some companies increased hiring to meet demand. Worries about unemployment have dampened services activity in recent months.
Wang Zhe, senior economist at Caixin Insight, said: "Employment remained an important focus. An expansion of employment relies on long-term improvement in the economy. Macroeconomic policy supports are essential, especially when there are still many uncertainties in domestic and overseas economies."
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