China’s manufacturing sector contracted for a fifth straight month in August, official purchasing managers index data showed on Sunday, as U.S. tariff concerns still weighed on export orders, while domestic demand remained sluggish.
Manufacturing PMI came in at 49.4, slightly higher than July’s 49.3 but below the market forecast of 49.5. The reading remained under the 50-point threshold that separates growth from contraction, pointing to continued weakness in the industrial sector.
While the manufacturing sector had shown some signs of recovery in June, especially following a trade deal between the U.S. and China, recent readings indicated that activity still remained under pressure.
Key to market sentiment this month was the extension of the U.S.–China tariff truce for another 90 days, which maintained U.S. duties on Chinese imports at 30% and Chinese tariffs on U.S. goods at 10%, though uncertainties surrounding the agreement continue to weigh on business confidence
Local demand in China also remained weak, as recent stimulus measures from Beijing provided temporary relief.
China’s non-manufacturing PMI read 50.3 in August, meeting expectations and rising from the 50.1 seen in the prior month.
The broader composite PMI, which combines manufacturing with services and construction, rose to 50.5 from July’s 50.2, suggesting that strength in non-manufacturing sectors provided some offset.
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