China's manufacturing shrinks most since 2009Staff writer ▼ | September 2, 2015
Chinese manufacturers reported the sharpest deterioration in operating condition in more than six years in August and the service sector expanded at the slowest pace in the current 13-month sequence of growth.
Asia The slowest pace in the current 13-month sequence of growth
The sector has been contracting for six successive months. The reading was above the flash score of 47.1 but was down from 47.8 in July.
Total new orders and export business declined at faster rates than in July, contributing to the biggest contraction in output since November 2011.
Consequently, manufacturers reduced their purchasing activity at the fastest pace since March 2009. At the same time, weaker client demand led to the rise in stocks of finished goods for the first time in six months.
Meanwhile, softer demand conditions contributed to marked falls in both input costs and output charges in August.
The Caixin composite PMI signaled a renewed fall in overall business activity in August. The indicator fell below the neutral mark in August to 48.8 from 50.2 in July. It was the fastest contraction of output since February 2009.
The services PMI came in at 51.5 in August, down from 53.8 in July. It signaled the slowest increase in activity in the current 13-month sequence of expansion.
Total new order growth at service sector companies weakened in August. Softer activity led to a slower increase in employment in the sector. Companies registered lower backlogs of work for the seventh successive month in August.
According to another joint report released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing on Tuesday, non-manufacturing activity, including activity levels at the services and the construction sectors, expanded in August, but at a slightly slower pace.
The official non-manufacturing PMI dropped to 53.4 in August from 53.9 in July. The index for services came in at 52.6 versus 52.8 in the prior month and that for construction slid to 57.8 from 60.1.
The official manufacturing PMI fell to 49.7 from 50.0 in July. ■