Factory activity in China has proven to keep growing amid the country’s escalating trade war with the U.S, according to a survey released on Monday.
The Caixin/Markit factory Purchasing Managers’ Index (PMI) was 50.4 in August — better than than the 49.8 expected by many analysts. The number is higher than the Cixin/Markit PMI in July, 49.9.
What is PMI?
The PMI is a survey of how businesses view the operating environment. The survey offers a first glimpse into what’s happening in an economy, as they are usually among the first major economic indicators released each month.
The official PMI survey typically polls a large proportion of big businesses and state-owned enterprises. The Caixin indicator features a bigger mix of small- and medium-sized firms.
PMI readings above 50 indicate expansion, while those below that signal contraction.
The country PMI is currently closely watched by the global investor. It will help the investor to know the signs of trouble amid a domestic economic slowdown and the ongoing U.S.-China trade dispute faster.
China Growing PMI
The Caixin/Markit factory (PMI) in August, 50.4, shows that the country produces in increasing. On the other hand, the export sales are still declining following the growing tension of China – U.S trade war. It fell to the lowest level this year in August.
Meanwhile, the manufacturing sub-index for new orders stayed in expansionary territory in August but inched down from July. The manufacturing PMI fell to 49.5 in August from 49.7 in July. Consequently, that shows flat demand for manufactured products.
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Despite the improved headline PMI reading in August, the outlook is not rosy with long-term downward pressure. That will likely happen since the overall demand did not improve and foreign demand declined.
Moreover, there was no sign of an improvement in companies’ willingness to replenish inventories of inputs or in their confidence. Besides, industrial prices trended down.