China manufacturing activity improves in August

| September 2, 2011 | 0 Comments

Manufacturing activity in China grew for the first time in four months in August, two separate surveys have revealed.

Firstly, the official China Federation of Logistics and Purchasing (CFLP) said its purchasing managers’ index (PMI) edged higher to 50.9 last month from July’s reading of 50.7.

The index remains just above the crucial 50 level, which separates growth from contraction.

Secondly, the HSBC China Manufacturing PMI also said activity had picked up with the index creeping up to 49.9 in August from 49.3 the previous month.

China is the world’s largest exporter but demand from key markets such as the US and Europe has been weakening as growth within these economies continues to slow.

This was reflected in the data from CFLP which revealed the new export orders index fell by 2.1% in August to 48.3.

Meanwhile, the input prices sub-index (an indicator of inflationary pressure) increased to 57.2 last month from July’s 56.3.

However, the pick-up in input prices could fuel further concerns about inflationary pressures.

China’s Government has been taking steps to cool the world’s second largest economy and rein in stubbornly high inflation – which is currently at a 3-year high.

Measures include slowing economic activity and lifting interest rates; Prime Minister Wen Jiabao has previously said that the Government will make reining in prices its top priority.

Tags: CFLP, , China Federation of Logistics and Purchasing, , , , ,

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