The purchasing managers’ index (PMI) for China’s manufacturing sector decreased to 51 in August from 51.1 in July, the National Bureau of Statistics (NBS) said Monday.
A reading above 50 indicates expansion, while a reading below reflects contraction. It is the sixth month in a row that the figure remained in the expansion territory.
NBS senior statistician Zhao Qinghe said policies of balancing epidemic control and economic development yield notable fruit, and the economy keeps recovering with good prospects.
The sub-indices of the manufacturing PMI acted as evidence of further economic recovery.
The sub-index for production stood at 53.5 in August, with that for new orders at 52. The sub-index measuring new export orders gained 0.7 points to 49.1.
“The production and operation activities of Chinese enterprises have been continuing a sound momentum,” Zhao said.
NBS data released Monday also showed an extensive rebound in non-manufacturing sectors as their PMI came in at 55.2 in August and service suppliers, including those particularly hit hard by the epidemic, showed stronger business vitality.
Sectors including railway, air transport and hospitality all logged busier business activities, with their sub-indexes standing above 60.
This month, demand continued to recover, foreign trade policy took effect, new growth driver development accelerated, the market gradually picked up, and business expectations improved, said Zhao.
Despite the positive signs, the PMI for small businesses went down 0.9 points to 47.7. “Many small firms reported problems of insufficient demand and financial stress,” said Zhao. “They were still faced with hardships in production and operation.”
Wen Bin, chief analyst at the China Minsheng Bank, said more efforts should be made to step up support for key areas and weak links, provide more targeted and inclusive policies for small and micro businesses, reduce burdens of enterprises, and increase income of residents to enhance consumption capacity and willingness to spend.
Other key indicators including consumption, jobs and foreign trade continued to warm up in recent months, and the revival is expected to extend through the rest of the year amid efforts to buoy domestic demand.
Following a stronger-than-expected Q2 rebound in GDP, Global credit rating agency Moody has raised its growth forecast for the Chinese economy this year to 1.9 percent from 1 percent earlier.