Chinese manufacturing activity accelerated to its fastest pace in five months this month, helped by rising export orders and purchasing, according to a survey released yesterday.
The HSBC China Manufacturing purchasing managers index, or PMI — a seasonally adjusted index designed to measure the performance of the manufacturing economy — rose this month to 52.9. That compared with 51.9 last month and was the highest level since April. Numbers above 50 show manufacturing activity expanding.
“A pick up in new orders means that domestic demand is still strong. Despite uncertainties in global demand, we expect China to rely on continued investment in ongoing infrastructure projects and resilient consumption to grow by around 9 percent in the rest of the year,” Hongbin Qu (屈宏斌), chief economist for China at HSBC, said in the report.
China’s economic growth slowed to 10.3 percent over a year earlier in the second quarter, down from its blistering 11.9 -percent first quarter pace. But recent indicators have assuaged worries that the economy might be headed into a more severe slowdown.
Despite the positive trends for this month, the survey’s findings were not entirely upbeat.
New export activity rose after declining for three straight months, but the growth rate was marginal, the report said. It also said that average costs, especially for raw materials, rose substantially, with inflation sharply higher.
China’s overall inflation edged higher in August as the nation’s worst flooding in a decade drove an increase in food costs and industrial growth continued to quicken. The 2.8 percent inflation rate for the first eight months of this year was close to the government’s ceiling of 3 percent.
The HSBC survey was released several days early, due to an upcoming public holiday beginning tomorrow.
The state-affiliated China Federation of Logistics and Purchasing, which also issues a monthly PMI has not yet released data for this month.