Caixin and official manufacturing PMIs diverged while official nonmanufacturing PMI picked up marginally in August, UOB Group Economist Ho Woei Chen notes.

Signs of weaker activities in manufacturing

“The Caixin and official manufacturing PMIs diverged while the official nonmanufacturing PMI picked up marginally in Aug after falling consecutively in the four preceding months. Employment and prices weakened for both the manufacturing and nonmanufacturing sectors in Aug.”

“Signs of weaker activities particularly for the manufacturing sector suggest that it will be challenging for China to sustain 1H24’s growth rate of 5.0% for the remainder of the year, likely missing the official growth target of “around 5.0%” this year.”

“We maintain our forecast for 2024 GDP growth at 4.9% with risks still biased to the downside.”