HSBC China PMI Rises

The HSBC PMI  previews business conditions in a range of industries before official monthly output data releases, China’s rose to 49.9 in August from 49.3 in July.

Factory inflation quickened in August, with the sub-index for input prices rising to 55.9.

Both output and employment rebounded to above the 50 line for the first time in three months.

Indeed, HSBC believes a PMI reading of as low as 48 in China still points to annual growth of 12-13 % in industrial output and a 9% expansion in GDP

Factory output rose during August, but the output sub-index was at a level indicative of only a marginal rate of expansion. Firms also reported shortages of raw materials, as well as machinerymaintenance.

The new orders sub-index fell below 50 for the first time since July 2010, while the sub-index for new export orders showed a slight improvement in August but still signalled contraction for four months in a row due to weak global demand.

Average input prices continued to rise. Firms that reported a rise in input prices generally commented on higher raw material costs.

The sub-index for Stock of purchases inched up in August but stayed below 50, signalling a further decline in stocks of raw materials and semi-manufactured goods.

The employment sub-index increased above 50 in August, signalling a rise in manufacturing jobs for the first time in three months.