The HSBC China Purchasing Managers’ Index, a composite indicator designed to provide a snapshot of operating conditions in the manufacturing economy, increased to 50.1 in August, ending three months of decline.
The index had fallen to an 11-month low of 47.7 in July.
“This implies that growth in China's manufacturing sector has started to stabilize on the back of a modest rebound of new orders and output,” said Hongbin Qu, chief economist for China and co-head of Asian economic research at HSBC. “This was mainly driven by the initial filtering through of recent stimulus measures and companies’ restocking activities. We expect some upside surprises to China's growth in the coming months.”
China’s official government PMI edged up to 51.0 in August, the highest figure in 16 months and up from 50.3 in July.
The official survey focuses on bigger and state-owned firms, while the HSBC PMI covers more smaller and private-sector manufacturers.