An official survey has found that Chinese manufacturing activity grew at its fastest pace in almost two years in August.
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The Markit/CIPS Purchasing Managers’ Index (PMI) – a closely watched gauge of factory activity – jumped to a 10-month high of 53.3 in August, recovering from the three-year low in July hit after Britain’s June 23 vote to leave the European Union.
Analysts polled by Reuters had predicted a reading of 49.9.
Manufacturers in August reported slower growth in production than they did in July.
Figures provided by NBS’ Zhao showed that small- and medium-sized companies were having a harder time than large firms, which generally have better access to loans and the market, with the PMI for smaller manufacturers contracting and that for bigger ones expanding.
The ADP National Employment Report on Wednesday showed US private employers adding 177,000 jobs in August, slightly above the 175,000 forecast by a Reuters survey of economists, and contracts to buy previously owned homes surged in July.
The August ADP employment report – where the July headline figure was also revised up to 194,000 from 179,000 – should help build confidence in the consensus expectation that non-farm employment payrolls may have risen 180,000 in August, ANZ Research said on Thursday morning.
“It may be that the July’s drop in the manufacturing PMI overstated the sector’s weakness in the immediate aftermath of the Brexit vote and that August’s rebound overstates its strength – but it is certainly reassuring to see the manufacturing sector bounced back in August”. Continued growth in new orders is a ray of optimism for a sector keen to avoid this correction becoming a downturn.
A reading above 50 indicates expansion.
The Caixin August number, however, contrasted with official PMI data released earlier in the day.
An official survey on the services sector showed the sector continued to expand at a rapid pace, though slightly more modestly than in July.
Other US data due later today includes Challenger job cuts, final manufacturing PMI, ISM manufacturing PMI, construction spending, ISM manufacturing prices, and total vehicle sales.
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Brent crude futures LCOc1 added 0.2 percent to $47.00 per barrel, after falling 2.8 percent overnight but still gaining 11 percent for August. The euro was steady at $1.1162.
