NBS PMI breakdown:

The large enterprise PMI drops to 50.4%, -0.1 pp

The medium-sized enterprise PMI 48.7%, -0.7 pp

Small-size business activity rises to 46.4%, -0.3 pp

In August, China's Manufacturing Purchasing Managers' Index (PMI) declined to 49.1%, indicating a decrease in economic activity within the manufacturing sector. This drop in the PMI reflects various factors, including recent high temperatures, heavy rainfall, and seasonal production slowdowns in some industries. Here's a breakdown of the key points:

1. Slower Production and Demand:
- Both production and market demand experienced a slight deceleration, with the Production Index and New Orders Index dropping to 49.8% and 48.9%, respectively.
- Industries like food, beverage, and tea processing, rail and aerospace equipment, and electrical machinery showed strong growth, with indices above 54.0%.
- However, sectors such as chemical fibers, rubber and plastic products, ferrous metal smelting, and special equipment manufacturing faced weaker demand and production for the second consecutive month.

2. High-Tech and Equipment Manufacturing Recovering:
- The high-tech and equipment manufacturing sectors returned to expansion, with PMIs of 51.7% and 51.2%, respectively, marking significant improvements over the previous month.
- The consumer goods sector's PMI was neutral at 50.0%, while energy-intensive industries saw a substantial decline to 46.4%, contributing significantly to the overall drop in the manufacturing PMI.

3. Price Indexes Declining:
- Due to insufficient demand and fluctuations in key commodity prices like crude oil, coal, and iron ore, the indices for the purchase prices of major raw materials and factory prices fell sharply to 43.2% and 42.0%, respectively.
- Sectors like petroleum processing and ferrous metal smelting experienced significant price declines, reflecting overall lower market prices.

4. Large Enterprises Maintain Expansion:
- Large enterprises continued to expand, with a PMI of 50.4%, although slightly down by 0.1 percentage points from the previous month. These companies have consistently supported overall economic stability.
- However, small and medium-sized enterprises faced increased operational pressures, with PMIs of 48.7% and 46.4%, respectively, indicating more significant challenges compared to larger firms.

Overall, the manufacturing sector is showing signs of strain, particularly in smaller enterprises and energy-intensive industries, while high-tech and equipment manufacturing are bright spots amid the broader economic slowdown.