China factory activity falls again as power cuts curb output

China's factory activity contracted in August for a second straight month, with the economy taking a hit from power shortages spurred by a historic drought, on top of a property market crisis and Covid outbreaks.

The official manufacturing purchasing managers index rose to 49.4 from 49 in July, according to a statement from the National Bureau of Statistics on Wednesday. That was slightly higher than the 49.2 in a Bloomberg survey of economists, but still below the 50 mark that separates expansion from contraction.

The non-manufacturing gauge, which measures activity in the construction and services sectors, fell to 52.6 from 53.8 in July. That was higher than the consensus forecast of 52.3.


"Power cuts and factory suspension as well as Covid outbreaks that have spread to every province have imposed a significant hurdle to production and demand," said Bruce Pang, chief economist and head of research for Greater China at Jones Lang LaSalle Inc.

NBS analyst Zhao Qinghe also cited infections and hot weather as "negative factors," adding that the "recovery of manufacturing production and demand still needs to be strengthened."Bloomberg