What happened
China’s official manufacturing PMI rose to 49.8 in August from 49.2 in July, exceeding market forecasts of 49.5 but remaining below the 50 mark that separates contraction from growth. Concurrently, construction activity sank to its lowest level since the start of the pandemic, maintaining intense pressure on Beijing.
Why it matters here
Contraction in Chinese manufacturing and sluggish construction directly impact Australian raw material export volumes. While 16 out of 21 surveyed industries showed month-on-month operational improvements, lingering contraction underscores that Beijing's previous targeted economic support measures have yet to establish a self-sustaining recovery.
What to watch
Detailed non-manufacturing PMI sector breakdowns and upcoming official policy announcements from Beijing regarding fresh targeted fiscal stimulus packages aimed at reviving construction.
Source
marketindex.com.au