The Markit compiled HSBC China manufacturing sector purchasing managers´ index (PMI) for the month of August has come in at 47.6, down from 49.3 in July, marking a tenth successive month-on-month deterioration and confounding expectations of an impending stabilization.

In fact, the PMI is now at its lowest level since March 2009.

New business decreased at the sharpest rate in nine months while job shedding was recorded for the sixth month in succession. On the price front, average input costs declined at the sharpest rate in 41 months, while the rate of output price discounting remained sharp.

Commenting on the China Manufacturing survey, Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said:

"The final reading of the HSBC manufacturing PMI (August) confirmed that China's manufacturing sector still faces intensifying downward pressure. New export orders contracted at the fastest pace since March 2009, this, combined with a record high in stocks of finished goods sub-index, and a 41-month low employment index, suggests China's exporters are facing increasing difficulties amid stronger global headwinds. Beijing must step up policy easing to stabilize growth and foster job market conditions."

AB

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