A new survey showed on Monday that China’s manufacturing activity in August grew at the slowest pace in over a year.
The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) matched economists forecasts and fell from July’s 50.8 to 50.6 in August – the weakest recording since June 2017.
“Latest data indicated that demand conditions softened, with total new business rising at the slowest pace for 15 months,” said the Beijing-based media outlet Caixin.
“Weaker foreign demand contributed to the softer increase in overall new work, with export sales declining for the fifth month in a row.”
“Optimism regarding future production remained relatively subdued in August, with confidence little-changed from June’s recent low. Positive forecasts were generally linked to expectations of rising client demand. However, concerns over the ongoing China-US trade war and softer demand conditions weighed on overall sentiment.”
The PMI is measured out of one hundred. A score over fifty indicates a positive change.
The survey results come as the US ramps up tariffs on Chinese goods.
In a note accompanying the survey results, Zhengsheng Zhong, the director of Macroeconomic Analysis at CEBM Group said: “The manufacturing sector continued to weaken amid soft demand, even though the supply side was still stable…I don’t think that stable supply can be sustained amid weak demand.”
“In addition, the worsening employment situation is likely to have an impact on consumption growth. China’s economy is now facing relatively obvious downward pressure.”
Chinese analysts have predicted this trend is likely to continue into the near future due to the US/China trade tensions and the possibility of further tariffs.