China on Monday announced that manufacturing activity expanded in the month of August as the country continued to recover from the coronavirus pandemic.
The official manufacturing Purchasing Manager’s Index (PMI) for the month of August came in at 51.0 as compared to 51.1 in July, according to the National Bureau of Statistics.
However, the pace of expansion missed expectations. Analysts polled by Reuters had expected August PMI to come in at 51.2.
PMI readings above 50 indicate expansion, while those below that signal contraction. PMI readings are sequential and indicate on-month expansion or contraction.
China’s manufacturing sector was battered earlier this year as factories shut due to large-scale lockdowns to contain the coronavirus pandemic.
But recent data out of China paint a picture of recovery, with expansion in manufacturing activity and industrial output rising for the fourth straight month in July.
The recovery in China is driven partly by government stimulus spurring infrastructure investment and resilient exports as medical supplies shipments jumped in the first half of the year.
Another set of factory data will be released on Tuesday by Caixin and IHS Markit. This private survey features a bigger mix of small- and medium-sized firms. In comparison, the official PMI survey typically polls a large proportion of big businesses and state-owned companies.
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