Chinese manufacturing hits 9-month low

Source: Financial Times

China’s economy weakened further in August, according to a survey of the manufacturing sector that fell well short of expectations.

The purchasing managers’ index, an important gauge of industrial activity, slouched to 49.2 in August, a nine-month low. It had been forecast to stay roughly level with July’s 50.1 reading.

Analysts had long predicted that China’s economy, slowing since early last year, would enjoy a rebound by about now, but the sluggish PMI points instead to a more serious downturn. That will be unwelcome news for the world economy as Europe slides towards another recession and the US struggles to gain momentum.

“China’s manufacturing sector continues to struggle, weighed down by a significant domestic slowdown, a wholly unsupportive external climate and a completely insufficient policy response,” economists with IHS Global Insight wrote in a note. “The government has underestimated the pace of the slowdown and is behind the curve.”

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