China Manufacturing Sector Sinks Into Contraction - Caixin

The manufacturing sector in China fell into contraction in August, the latest survey from Caixin revealed on Wednesday with a manufacturing PMI score of 49.2.

That missed expectations for a score of 50.2 and was down from 50.3 in July.

It also drops beneath the boom-or-bust line of 50 that separates expansion from contraction.

Panelists said the resurgence of the COVID-19 virus at home and abroad had weighed on the sector's performance. Restrictions to contain the virus also impacted supplier performance, which deteriorated solidly, while shortages led to steeper rises in cost burdens and prices charged. At the same time, subdued market demand led firms to trim their purchasing activity and payroll numbers slightly.

Chinese goods producers recorded the first fall in output since February 2020 in August. Survey respondents frequently mentioned that the recent uptick in COVID-19 cases and subsequent restrictions had impacted production, dampened demand and led to greater difficulties sourcing inputs.

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