On August 31st, the Service Industry Survey Center of the National Bureau of Statistics and the China Federation of Logistics and Purchasing released data showing that in August, the Purchasing Managers' Index (PMI) of China's manufacturing industry was 49.7%, an increase of 0.4 percentage points from the previous month.

Manufacturing PMI rebounded for three consecutive months

This indicates that China's manufacturing industry continues to contract, but the contraction pressure has steadily eased Zheng Houcheng, Chief Macroeconomist at Yingda Securities, said.

Wang Qing, Chief Macro Analyst of Dongfang Jincheng, stated that the manufacturing PMI rebounded for three consecutive months in August, mainly due to the clear requirement of the Central Political Bureau meeting on July 24th to "increase macroeconomic policy regulation and focus on expanding domestic demand".

Subsequently, including the central bank's interest rate cuts, a series of support policies for the real estate industry, and other measures to promote consumption and stabilize investment, the supply and demand sides of the manufacturing industry rebounded. In addition, the index has been in a contraction range for four consecutive months, with a low month on month basis, which is also a reason for the rebound of the manufacturing PMI index in August.

Among the five sub indices that make up the PMI of the manufacturing industry, except for employees who continue to explore on the rise and fall line, the other four main sub indices are all upward compared to the previous values

What is the next recovery trend of the manufacturing industry

Wang Qing stated that considering the further effects of stable growth policies, it is expected that the manufacturing PMI index will rise to an expansion range of over 50% in September and continue its expansion trend in the fourth quarter.

Wang Qing specifically pointed out that there are two main uncertain factors that will affect the PMI index of the manufacturing industry in the later stage. Firstly, under the increasing downward pressure on the global economy, the degree of slowdown in external demand in the second half of the year. The July Politburo meeting called for "multiple measures to be taken simultaneously to stabilize the basic situation of foreign trade and foreign investment", indicating that policy has been arranging measures to address this trend.

The second is how the real estate market can stabilize and rebound in the fourth quarter under the prospect of strong real estate support policies. "This is the key to the overall impact of the second half of the year

Zhou Maohua said that from the perspective of trend, the recovery of the domestic economy to normal is a major trend, demand is gradually warming, and macro policies continue to rescue the manufacturing industry. It is expected that the recovery trend of the manufacturing industry is expected to continue.