Breakdown of the Official Manufacturing PMI

Shrinking demand was the main factor dragging down the official headline manufacturing PMI. The new orders index dropped below 50 for the first time since February 2020. The new export orders index also plunged to 46.7 in August from 47.7 in July, reaching its lowest level since June 2020. The new export orders index has been on a downward trend since March 2021, reflecting the uncertainties associated with weak external demand. Inventories remained relatively stable. 

The raw material index stayed unchanged, while finished goods inventory ticked up. In August, both the purchasing price index and the producer price index dropped. However, the purchasing price index was still above 60 and the gap between the purchasing price index and the producer price index was still wide, revealing the continued pressure on manufacturers. The official manufacturing PMI for small enterprises slightly improved to 48.2 in August. 

Breakdown of the Caixin Manufacturing PMI

According to the Caixin survey, in August Chinese manufacturers recorded the first contraction in output since February 2020 as the Caixin output index dropped to 47.7 from 50.8 in July.

Except for the stocks of purchases index, all the other four components of the Caixin manufacturing PMI deteriorated. 

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