August 2024 official Chinese PMIs from the National Bureau of Statistics (NBS):
Composite is 50.1
August Manufacturing PMI 49.1
- expected 49.5, prior49.4
Services 50.3
- expected 50.0, prior 50.2
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The Chinese economy has been showing, and continues to show, a patchy and uneven recovery. Key trouble spots include:
- an uncertain property sector outlook, the sector is mired in debt
- subdued consumer confidence and demand
- manufacturing overcapacity in some sectors
- still below target underlying inflation (impacting this are the above points on weak domestic demand and supply overcapacity)
- on the horizon are potentially higher tariffs on Chinese exports
Authorities have been lobbing targetted support at the economy, in a piecemeal fashion. There is still plenty of work to do.
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China has two primary Purchasing Managers’ Index (PMI) surveys – the official PMI released by the National Bureau of Statistics (NBS) and the Caixin China PMI published by the media company Caixin and research firm Markit / S&P Global.
- The official PMI survey covers large and state-owned companies, while the Caixin PMI survey covers small and medium-sized enterprises. As a result, the Caixin PMI is considered to be a more reliable indicator of the performance of China’s private sector.
- Another difference between the two surveys is their methodology. The Caixin PMI survey uses a broader sample of companies than the official survey.
- Despite these differences, the two surveys often provide similar readings on China’s manufacturing sector.
- The Caixin manufacturing PMI will follow on Monday, services on Wednesday