On September 1, the China Manufacturing Purchasing Managers' Index (PMI), released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing, revealed that China's manufacturing PMI reached 51.0% in August 2013, marking an increase of 0.7 percentage points from July. This was the highest level of the year so far, signaling a positive shift in the manufacturing sector.
Zhao Qinghe, a senior analyst at the National Bureau of Statistics, noted that the momentum behind China’s manufacturing industry has strengthened, with the trend of economic stabilization and recovery becoming more evident. Sun Lijian, vice president of the School of Economics at Renmin University, also expressed optimism, stating that the improvement in the PMI indicates a more favorable outlook for the latter half of the year.
The report highlighted that all five sub-indexes of the PMI were higher than in the previous month. Notably, the new orders index rebounded for the second consecutive month, reaching 52.4%, the highest since 16 months ago. This provided strong support for the overall recovery in the manufacturing PMI. The production index rose to 52.6%, while the raw material inventory index increased to 48.0%, and the employment index climbed to 49.3%. Additionally, the supplier delivery time index improved to 50.4%.
Zhang Liqun, a researcher at the State Council Development Research Center, pointed out that current demand for manufacturing is rising, and the economy shows signs of improvement. He attributed part of this growth to an unexpected improvement in the external environment, which has boosted exports.
Data also showed that the new export orders index in August stood at 50.2%, up 1.2 percentage points from July—marking the first time since April 2013 that it crossed the 50% threshold. Zhao Qinghe added that recent government policies aimed at stabilizing growth, adjusting structures, and promoting reforms have helped boost market confidence and stabilize public expectations.
Industry experts believe that with ongoing urbanization projects, accelerated railway and infrastructure investments, and tax cuts for small businesses, the economy is expected to continue its upward trajectory. However, they also warned that small enterprises remain in a difficult position, with their PMI at 49.2%—the 17th consecutive month below the 50% threshold.
Liu Xiahui, director of the Institute of Economic Research, noted that while larger companies are more responsive to economic improvements, smaller firms tend to be more cautious and slower to react.
In the steel industry, the PMI for August reached 53.4%, up 0.9 percentage points from July, indicating a stable and improving trend. This was largely due to reduced production and improved supply-demand balance. The China Federation of Materials expects increased demand during the "Golden September and Silver October" season, leading to steady development in the domestic steel market. However, rising costs are squeezing profit margins.
It is important to note that the steel industry PMI has a critical point of 52%, above which the industry is considered to be operating well, and below which there are signs of contraction. Analysts believe that with economic recovery, environmental policies, and improved manufacturing conditions in Europe and the U.S., the steel market is in a favorable position. With better weather, construction activity is accelerating, and market sentiment remains positive.
Despite this, the China Federation of Materials cautioned that continued steel production capacity expansion may increase supply pressure, and factors limiting price rebounds should not be overlooked. Qiu Yuecheng of Xiben Shinkansen said that while the potential for price increases is limited, a sharp decline is unlikely.
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