China Manufacturing Activity Returns To Growth

(RTTNews) - China's manufacturing sector returned to growth in August as rising orders pushed up purchasing activity and unfinished business but firms remained cautious about hiring, survey data from S&P Global showed on Monday.

The RatingDog manufacturing Purchasing Managers' Index posted 50.5 in August, up from 49.5 in July. A reading above 50.0 indicates expansion in the sector.

Although marginal, the rate of improvement was the quickest in five months.

The survey showed that rising new orders underpinned a renewed expansion of the manufacturing output. Although the pace of growth was moderate, new order growth was the quickest since March.

Sales were driven by firmer domestic demand as new export orders decreased slightly. Stronger inflows of orders led to an accumulation of backlogged work. Despite greater capacity pressures, manufacturers remained cautious with regards to their staffing levels.

Purchasing activity rose for a second straight month amid higher new orders and production. Stocks of finished goods accumulated due to growth in production and delays in outbound shipments.

On the price front, the survey showed that average input costs increased for a second straight month in August. The rate of inflation was the steepest since November 2024. Meanwhile, average selling prices were unchanged in August, following an eight-month period of decline.

Sentiment regarding the one-year outlook for output remained positive in August. Producers were the most upbeat since March amid hopes that economic conditions will improve.

"With weak domestic demand, potentially overstretched external orders, and slow profit recovery, the durability of the improvement depends on whether exports truly stabilize and whether domestic demand can pick up pace," RatingDog Founder Yao Yu said.