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People’s Daily: HSBC August Chinese Manufacturing PMI Suffered a Big Drop

People’s Daily recently reported that the August PMI (Purchasing Managers Index) number for China’s manufacturing industry dropped to 47.6, down from 49.3 in July. The number of new orders for exports dropped to its lowest level in nine months. Average invested cost was at its lowest point for the last 41 months. The level of inventory was the highest its been since HSBC started collecting PMI data. Over the the last 10 consecutive months, China’s manufacturing sector has declined in overall performance. For the past four months, the demand for raw materials has weakened and average supplier preparation time has shown improvement. According to the HSBC report, the main cause of the slowdown in the manufacturing industry is the low volume of new orders. PMI is an indicator of financial activity reflecting purchasing managers’ acquisition of goods and services. A PMI number below 50 typically reflects a decline.
Source: People’s Daily, September 3, 2012