Caixin Manufacturing PMI Comfortably Above Expectations

The Caixin manufacturing PMI comfortably beat expectations for the August print, rising to 51.0, versus 49.0 forecast (prior was 49.2). This follows a better than expected official manufacturing PMI print yesterday. The headline index remains within 2023 range, but at face value, it suggests growth momentum is not as soft as feared, it may help ease the pace of downgrades for China's growth outlook that we have seen in recent months (2023 consensus is at 5.1%, down from May highs of 5.7%).

• As Reuters notes; "The Caixin manufacturing PMI surveys around 650 private and state-owned manufacturers and focuses more on export-oriented firms in coastal regions, while the official PMI surveys 3,200 companies across China."
• "Manufacturers reported increases in both output and total order intakes thanks to firmer market demand, the Caixin survey showed. The upturn in sales contrasts with deepening declines in new export orders, suggesting stronger domestic demand was the main source of growth. Planned company expansions meanwhile supported a rise in employment in the sector, leading to the fastest rate of job creation since March 2010."
• "Backlogs of work rose marginally for the third straight month. Temporary factory closures due to high temperatures and floods reportedly pushed up unfinished workloads. "The slight rise in prices buffered the pressure of deflation, logistics remained smooth, inventory of raw materials fell, and manufacturers held on to their optimism, although to a limited extent," said Wang Zhe, an economist at Caixin Insight Group."