Over the weekend, we got the official PMIs:
China Manufacturing PMI for August 49.1 (49.5 expected), Services 50.3 (50.0 expected)
More details:
The Caixin S&P Global Manufacturing Purchasing Managers’ Index was much better, at 50.4.
From the report, in brief:
- Demand rose as total new orders resumed growth, with demand for intermediate goods increasing.
- Exports fell for the first time in eight months.
- Employment held steady after 11 months of contraction
- Input and output prices fell.
- Lower prices of raw materials such as industrial metals have led to lower input costs.
- Producer prices fell amid sales pressure, with the corresponding index hitting a four-month low.
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There are two main PMI surveys in China – the official PMI released by the National Bureau of Statistics (NBS) and the Caixin China PMI published by media company Caixin and research firm Markit/S&P Global.
- The official PMI survey covers large, state-owned enterprises, while the Caixin PMI survey covers small and medium-sized enterprises. As a result, the Caixin PMI is considered a more reliable indicator of private sector performance in China.
- Another difference between the two surveys is their methodology. The Caixin PMI survey uses a wider sample of companies than the official survey.
- Despite these differences, the two surveys often provide similar readings about China’s manufacturing sector.
- This will be followed by the Caixin Services Purchasing Managers’ Index (PMI) on Wednesday.