China: Services-manufacturing gap closes – ABN Amro

Economists at ABN Amro note that China’s Manufacturing PMIs improved in August, narrowing the gap between services and manufacturing.

Key quotes

“China’s PMIs for August published over the past couple of days bring some signs of stabilization, with the manufacturing PMIs surprising to the upside. For the first time since February, both manufacturing PMIs published by NBS and Caixin picked up from the previous month.”

“Earlier this year, the services PMIs in both the official and Caixin’s survey showed a big jump, as the services sectors benefited the most from the zero-Covid exit initiated in December 2022.“

“As a result, the divergence between services and manufacturing PMIs rose to multi-year highs in the first part of this year.”

“However, with the reopening rebound fading, services PMIs have come down over the past months, and – also with manufacturing PMIs now bottoming out – the gap between services and manufacturing PMIs has narrowed rapidly.”