The rise in activity in China’s manufacturing sector stumbled from a two-year high last month as fiscal support from Beijing began to fall away and as the Communist party signalled that it was comfortable with economic growth at present levels.
The August dip in China’s official purchasing managers’ index was the first for six months, but it leaves the index safely in positive territory. The reading came in at 51.1 in last month — on a scale where a level above 50 represents expansion and anything below contraction — down from 51.7 in July and below consensus forecasts among brokers.
The July reading, a two-year high, was interpreted as an effect of government stimulus measures — a programme of fiscal spending and credit-easing mechanisms that were always intended to be shortlived.
Analysts at IHS Global Insight said that it was unlikely that Beijing would step in with further stimulus between now and the end of the year.