The final reading of China’s purchasing managers’ index, or PMI, in manufacturing, released by HSBC-Markit Economics, is due on Sept. 1 at 09:45 p.m. EDT, and analysts vary on whether factory activity in China expanded or contracted in August, amid accelerated efforts by the government to resuscitate growth by boosting domestic demand.
HSBC’s preliminary survey of purchasing managers, or flash PMI, which was published on Aug. 22, found China’s manufacturing activity expanded to a reading of 50.1 in August -- its highest in four months and up from 47.7 in July.
The median consensus on HSBC's final manufacturing PMI, published by Capital Economics, is 50.2, which is marginally above the reading of the flash PMI.
According to Capital Economics, the preliminary reading of HSBC-Markit PMI was “far stronger than most had expected, providing further evidence that China’s economy has avoided an imminent hard-landing.”
“Flash and final readings have been very close recently, so we expect the final reading to be the same,” a research note from Capital Economics said.
But, a consensus figure published by FxStreet showed manufacturing contracted in August to hit 48.3, considerably lower than the preliminary estimate.
Official PMI data, published by China’s National Bureau of Statistics, which surveys state-supported companies, has traditionally showed more positive trends, as compared to private surveys such as the one released by HSBC-Markit.
“The official PMI has been hovering just above 50 for a while. The strength relative to the HSBC/Markit index most likely stems from the fact that the official survey is skewed to firms in heavy industries, which have benefited most from the recent investment-led rebound,” Capital Economics said.
“A strong rebound in the HSBC/Markit flash manufacturing PMI for August has added to evidence that a rebound is underway. As a result, we expect growth in industrial production to have picked up further,” the research group said.
China Manufacturing PMI By HSBC-Markit: Consensus Figures Vary As Some Expect Growth While Others Predict Continued Contraction
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