Manufacturing regains strength as PMI hits 51.7%
Post Date: 02 Sep 2010 Viewed: 462
CHINESE manufacturing rebounded in growth unexpectedly in August, indicating the sector may have recouped some steam, two surveys showed today.
The official Purchasing Managers' Index, a comprehensive gauge of industrial activities across the country, bounced back to 51.7 percent last month from 51.2 percent in July, the China Federation of Logistics and Purchasing said.
A reading above 50 percent signalled an expansion, and it was the 18th straight month for the official index to stay above that line.
Meanwhile, another survey by the HSBC showed that its China manufacturing purchasing managers' index rose to a three-month high of 51.9 in August, up from 49.4 in July which directed at a territory of contraction.
The HSBC survey, covering more than 400 manufacturing companies, is slanted more towards privately-owned and export-oriented firms, while the official PMI is weighted heavily towards big domestic companies.
"The official index beat our forecast of 51.5 percent," said Wang Qing, an economist at Morgan Stanley.
"The rebound last month should be mainly explained by the supportive seasonality. However, comparing with magnitude of historic rebound in August, this one was rather modest."
According to previous data for August, the index increased 1.5 percentage points in 2005, 0.7 percentage point in 2006, 2007 and 2009, while this year's growth was 0.5 percentage point.
"It implied that moderation of industrial activities as the result of tightening on property sector and supply-side adjustment to achieve energy-conservation target remains on track." Wang added.