China's factory activity in August shrank at its fastest pace in nine months as new export orders slumped and inventories rose, a signal that a persistent slowdown in economic growth has extended deeper into the third quarter.
The HSBC Flash China manufacturing purchasing managers index (PMI) fell to 47.8 in August, its lowest level since November, from 49.5 in July.
After hovering for several months just under the 50 mark that divides expansion from contraction, the index is now at levels rarely seen since the 2008-2009 global financial crisis.
A sharp drop in China's official producer price index in July, which marked the fifth straight month of producer price deflation, was also reflected in the HSBC survey. It showed a sub-index measuring factory input prices at its lowest level since March 2009.
The flash PMI also showed inventories piling up.
"Weaker-than-expected sales contributed to a further rise in holdings of finished goods at manufacturers' plants," Markit Economics, which conducted the survey, wrote in a note.THIS IS MORE PROOF THAT THE GLOBAL ECONOMY IS IN VERY DEEP AND STINKY DOO-DOO.
ONLY TWO THINGS CAN STOP A HORRIFIC GLOBAL DEPRESSION.:
- THE ELECTION OF ROMNEY
- AND A COMPLETE ROLLBACK OF ALL THE THINGS THAT HAVE MADE ENERGY EXORBITANTLY EXPENSIVE (IRAN, GLOBAL JIHAD, AND CO2PHOBIA AND ALL ANTI-CARBON TAXES AND REGULATIONS).