China’s factory activity expanded at the fastest clip in nearly a decade in August, bolstered by the first increase in new export orders this year as manufacturers ramped up production to meet rebounding demand.
The world’s second-biggest economy has largely managed to bounce back from the coronavirus crisis and the emerging bright spot in the forward-looking gauge of export orders could herald more durable and broad-based recovery in months to come.
The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) rose to 53.1 last month from July’s 52.8, marking the sector’s fourth consecutive month of growth and biggest rate of expansion since early 2011.
It beat analysts’ forecasts for a slight dip to 52.6. The 50-mark separates growth from contraction on a monthly basis.
The upbeat findings contrasted with an official survey on Monday, which showed China’s factory activity grew at a slightly slower pace in August as floods across southwestern China disrupts production.
But there were positive signs in both PMIs.
The official PMI’s improving trend in new export orders was similar to the private survey, while the former also showed solid growth in the crucial services sector in a boost to the economy’s continued recovery from the coronavirus shock.
In Tuesday’s Caixin, Chinese factories reported the first increase in new export orders this year in August as overseas countries eased COVID-19 restrictions to kick start their economies.
The pick-up in business also led to a further expansion in production, marking the sharpest gain in almost a decade.
The labour market also saw signs of improvement, with some companies increasing recruitment to meet production needs, although the gauge of employment continued to stay in negative territory for the eight straight month.