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Private Survey Shows China's Manufacturing Activity Accelerates in August, Diverging From Government Data

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Private Survey Shows China's Manufacturing Activity Accelerates in August, Diverging From Government Data

China's manufacturing sector expanded at a faster pace in August, contrasting with official figures that showed broader factory activity remaining in contraction territory.

The seasonally adjusted RatingDog China General Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 51.5 in August from 50.9 in July, maintaining its position above the 50.0 neutral threshold that separates growth from contraction.

The improvement was driven by an increase in new orders and demand, which elevated backlogs and created higher cost pressures for manufacturers. Meanwhile, employment remained relatively steady, and business confidence for the coming 12 months stayed positive.

"New export business rose at the fastest pace in six months, driven by strong growth in the consumer goods sector. Manufacturing output expanded for the ninth successive month, with the rate of growth reaching a three-month high, supported by stronger demand and capacity expansion," said RatingDog founder Yao Yu.

In contrast, the official manufacturing PMI released by the National Bureau of Statistics on Monday came in at 49.8 for August. While improving from July's reading of 49.2 and beating the consensus market forecast of 49.5, the official index remained below the 50-point line for the second consecutive month.

Analysts from ANZ noted that the data highlights an uneven economic transition within China.

"Exports are resilient, but the local service sector has not benefited much," ANZ economists Raymond Yeung, Zhaopeng Xing and Vicky Xiao Zhou said in a Monday note. They added that rising input and output price pressures reflect renewed tensions in the Middle East, which could point toward a firmer Producer Price Index print.

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