August Results of Chinese Sales Managers Survey

Chinese Manufacturing Sector problems close to outweighing growth in Services

The First Data on Economic Activity Levels in China - Every Month
The only survey with current month, month-on-month, monthly year-on-year, and forward looking questions
Updated: August 19, 2024

The difference between the Chinese Services and Manufacturing sectors performance continued to remain in evidence in August. The (larger) Services sector is continuing to grow, whereas the Manufacturing sector edged deeper into negative territory. The latest August Sales Managers Survey shows while that the Chinese economy as a whole is continuing to grow, albeit rather more slowly than in the pre Covid era, problems in the Manufacturing sector remain significant and are causing a dip in overall economic growth.

Source: World Economics
Note: Data Shown as a Diffusion Index. (50 = 'No Change', above 50 = Increasing growth, below 50 = Declining growth)

The Services sector continues to provide growth momentum, although even here, Business Confidence levels have fallen significantly, and no longer reflect high levels of confidence in the remainder of the third and fourth quarters. Overall a question mark has arisen over whether growth in the services sector can continue to propel the Chinese economy to its previously healthy levels of economic growth, given the drag of the less than buoyant Manufacturing sector.

There is no doubt that the Manufacturing sector of the Chinese economy remains subdued. The August reading of the Sales Managers Index for Manufacturing remained well below the 50 "no growth" line in August. There is little encouraging information to be found in the August numbers for the manufacturing sector.

Readers must now have a significantly optimistic disposition before they can start to believe that the world's great growth engine of the past few decades is moving back towards its previously central role in sponsoring global growth.

Sales Managers Index Components: All-Sectors

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About the Sales Managers Indexes

The Sales Managers' Indexes provide the earliest monthly data on the speed and direction of economic activity in key growth areas of the world.

The SMI’s (Sales Managers’ Indexes) are compiled and analysed by World Economics and are based on survey data collected from a panel of companies stratifying all Industry Classification Board (ICB) sectors which are weighted to reflect their contribution to national Gross Domestic Product.

Key advantages of the SMI's:

• The SMI's provide the first indication each month of the speed and direction of economic growth.
• The SMI's provide the most complete indication of growth, covering all private sector activity.
• The SMI's are based on a key occupational group - sales executives - uniquely able to sense accurate changes in business activity levels.
• The SMI survey base - salespeople - are used by virtually all businesses, including in frontier markets, unlike other occupational groups.
• The SMI's focus on the key countries contributing to over 60% of China growth in recent years.