China Manufacturing Continues Slide as New Tariffs Begin

Chinese manufacturing  contracted for the fourth straight month on the eve of the US increasing tariffs on Chinese goods and China’s reciprocal tariffs. The Official NBS Manufacturing PMI in China dropped to 49.5 in August 2019 from 49.7 in Julyh and below market expectations of 49.6.

Chinese manufacturing  contracted for the fourth straight month on the eve of the US increasing tariffs on Chinese goods and China’s reciprocal tariffs. The Official NBS Manufacturing PMI in China dropped to 49.5 in August 2019 from 49.7 in Julyh and below market expectations of 49.6.

China is suffering from the growing trade frictions with the US and sluggish domestic demand.

Purchasing Managers’ Index data from China’s National Bureau of Statistics published Saturday August 31.

Highlights

• Manufacturing 49.5 expected 49.6, prior 49.7
• In contraction for the fourth consecutive month
• New orders fell to 49.7 vs 49.8 in July
• Employment fell to 46.9 vs 47.1
• Output growth  fell to 51.9 vs 52.1
• Export orders showed slight improvement after being down for 15 straight monthes (47.2 vs 46.9)
• Buying level declined at the steepest rate since February at 49.3 vs 50.4
• Input prices dropped the most in seven months 48.6 vs 50.7
• Output charges fell for the fourth month in a row  to 46.7 vs 46.9).
• Xinhua report the NBS saying “demand moderated amid a complex economic environment”

Services

• 53.8 expected 53.7, prior 53.7
• First improvement in five months

Composite

• 53.0 prior 53.1
• Like most of the world Services holding up the manufacturing demise

Looking ahead

• Business sentiment weakened to its lowest since January (53.3 vs 53.6).
• Business Confidence in China averaged 51.82 Index Points from 2005 until 2019, reaching an all time high of 59.20 Index Points in April of 2008 and a record low of 38.80 Index Points in November of 2008.

The privately surveyed PMIs (Caixin/Markit) will be published from Monday (the manufacturing PMI is Monday, services and composite follow on Wednesday).

 Source: TradeEcconomics, Bloomberg

From The TradersCommunity News Desk