China's August Private Manufacturing PMI Rises to 51.5, Official Gauge Stays Below 50

A private survey showed that China's manufacturing sector expanded at a faster pace in August, driven by quicker growth in output, new orders, and exports. The Caixin manufacturing purchasing managers index (PMI) rose to 51.5 in August from 50.9 in July, remaining above the 50 mark that separates expansion from contraction.

Output grew at the fastest pace in three months, supported by stronger demand and capacity expansion. New orders increased at a quicker rate, with new export orders posting their largest gain in six months. Employment was broadly unchanged in August after rising in June and July, while backlogs of work increased at the fastest pace since March as demand strengthened.

Finished goods inventories grew at the fastest pace since September 2025, and companies expanded purchasing activity after reducing it in July. Input costs rose slightly from July, though overall cost pressures remained relatively mild. Manufacturers cut their output prices for the first time since 2026, mainly due to intense market competition and increased promotional discounts.

Data released by the National Bureau of Statistics on August 31 showed that the official manufacturing PMI stood at 49.8 in August, up 0.6 percentage points from July but still below the 50 threshold. The non-manufacturing business activity index was 49.0, also in contraction territory. The two surveys differ in sample coverage: the private survey reflects more the conditions of smaller, export-oriented firms, while the official survey covers a larger number of big enterprises.