China’s August PMIs delivered a clear split between recovering factories and still-soft domestic activity. PMI Manufacturing rose from 49.2 to 49.8, beating 49.6 expected and moving close to stabilization. More encouragingly, production climbed from 49.9 to 50.4, new orders surged from 48.5 to 50.6, and new export orders rose from 49.6 to 50.1. That suggests improvement was not confined to headline sentiment, although smaller firms remained notably weaker than large manufacturers.
Outside manufacturing, recovery was much less convincing. PMI Non-Manufacturing stayed at 49.0, versus 49.9 expected, as services remained at 49.3 and construction eased from 47.0 to 46.9. New orders slipped further from 44.4 to 44.1, highlighting weak underlying demand despite stronger activity in infrastructure, tourism-related industries, postal services and technology sectors. Employment also stayed subdued at 45.4, while business expectations remained positive but softened.
That divergence kept PMI Composite Output below 50, despite edging up from 49.3 to 49.5. Manufacturing is showing signs of stabilization, with both domestic and export orders moving into expansion, but services and construction have yet to follow. August therefore points to a recovery that is becoming firmer at factory level while remaining too uneven to lift broader economic activity into expansion.
Data Summary
| Indicator | Actual | Expected | Previous |
|---|---|---|---|
| PMI Manufacturing | 49.8 | 49.6 | 49.2 |
| PMI Non-Manufacturing | 49.0 | 49.9 | 49.0 |
| PMI Composite Output | 49.5 | — | 49.3 |
Selected PMI Manufacturing Components
| Component | Current | Previous | Trend |
|---|---|---|---|
| Production | 50.4 | 49.9 | Expansion |
| New Orders | 50.6 | 48.5 | Strong improvement |
| New Export Orders | 50.1 | 49.6 | Expansion |
| Purchases | 50.5 | 49.4 | Expansion |
| Imports | 48.6 | 47.5 | Improved |
| Purchase Prices | 56.6 | 53.2 | Sharply higher |
| Output Prices | 50.4 | 47.8 | Returned to expansion |
| Employment | 48.7 | 49.0 | Weaker |
| Business Expectations | 53.8 | 54.1 | Slightly lower |
Key Takeaways
- PMI Manufacturing improved from 49.2 to 49.8, beating 49.6 expected and moving closer to 50 expansion threshold.
- Manufacturing details strengthened more clearly than headline, with production rising from 49.9 to 50.4 and new orders jumping from 48.5 to 50.6.
- New export orders also moved into expansion, rising from 49.6 to 50.1, while purchases climbed from 49.4 to 50.5.
- PMI Non-Manufacturing stayed at 49.0, missing 49.9 expected. Services held at 49.3, while construction eased from 47.0 to 46.9.
- Non-manufacturing demand stayed weak, with new orders falling from 44.4 to 44.1.
- Price pressures strengthened across sectors. Manufacturing purchase prices jumped from 53.2 to 56.6, while output prices rose from 47.8 to 50.4.
- PMI Composite Output improved from 49.3 to 49.5, showing overall activity was still below 50 despite signs of stabilization in manufacturing.
