China’s manufacturing activity contracted for the first time in three months in August amid weakening demand, while power outages and new outbreaks of Covid-19 halted production, a private sector survey showed on Thursday. º).
The Caixin/Markit Industry Purchasing Managers’ Index (PMI) dropped to 49.5 in August from 50.4 in July, below analysts’ expectations of 50.2.
The unexpectedly weak reading echoed China’s official PMI released on Wednesday, which also fell below the 50-point mark that separates growth from contraction.
“The economy is still slowly recovering from a widespread outbreak of Covid-19 in the first half of the year. However, local outbreaks and the heat wave halted the trend and created further downward pressures, posing a threat to the recovery,” said Wang Zhe, senior economist at Caixin Insight Group.
Demand remained weak, with sub-indices of new orders and new export orders returning to contraction after two months of expansion.
Industry entrepreneurs cut jobs for the fifth month in a row to cut costs, adding to concerns over a weak labor market that is weighing heavily on consumption and consumer confidence.
They also reduced material purchases due to lower new orders.
Source: CNN Brasil
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