China's August Manufacturing PMI Rises to 51.5, First Improvement in Four Months
Macro
The China Manufacturing Purchasing Managers' Index (PMI) for August, released by S&P Global, came in at 51.5, up from 50.9 in the previous month, marking the first improvement in four months. The index has remained above the 50 threshold, which separates expansion from contraction, for nine consecutive months. Although export-led orders recovered, the improvement has not sufficiently spread to employment or corporate earnings, and a full recovery in domestic demand has yet to materialize. New export orders saw their highest growth in six months, driven by consumer goods manufacturers. This may include shipments for the year-end shopping season and front-loading demand in anticipation of U.S. tariffs. Overall new orders, including both domestic and foreign demand, remained positive for the 15th consecutive month, marking the longest expansion streak since 2018. Production also expanded for the ninth straight month, with consumer goods output recording its highest growth since September 2025. Meanwhile, employment was flat from the previous month, stalling after two consecutive months of job growth in June and July. Layoffs were notable among equipment and materials manufacturers. Additionally, companies were unable to pass on higher costs from rising crude oil and metal prices, and selling prices fell for the first time this year. S&P's survey focuses on small and medium-sized enterprises, while the manufacturing PMI for August released by China's National Bureau of Statistics, which primarily covers large enterprises, came in at 49.8, falling below 50 for the second consecutive month.
