China’s factory activity improves in August but stays stuck in contraction

China’s manufacturing sector showed faint signs of life in August, with the official Purchasing Managers’ Index climbing to 49.8 from 49.2 in July. That beat the consensus forecast of roughly 49.4, but the number still sits below the 50-point line that separates expansion from contraction. The data, released August 31 by the National Bureau of Statistics, marks the second consecutive month of contraction after July’s reading snapped a four-month run of growth. June’s PMI had come in at 50.3, comfortably in expansion territory. What’s dragging on the factory floor Soft domestic demand continues to weigh on Chinese manufacturers. Order inflows remained weak, and the country’s property sector, once the locomotive of economic growth, is still shedding momentum. Weather didn’t help either. Typhoon-related disruptions across southern and eastern China during July and August hampered logistics, delayed shipments, and forced temporary factory shutdowns. Some production sub-indices within the August reading showed incremental improvement. Factories appear to be maintaining output levels even as new orders soften. Private-sector surveys have painted a slightly rosier picture. The RatingDog/S...