Beijing, Aug 31: China’s manufacturing sector showed renewed signs of improvement in August, with factory activity gaining momentum as stronger orders and recovering domestic demand provided support to businesses.

The manufacturing Purchasing Managers’ Index (PMI) rose to 49.8 in August, up from 49.2 in July. Although the reading remained marginally below the 50-point mark that separates expansion from contraction, the increase points to a better operating environment for manufacturers.

The improvement was broad-based, with business conditions strengthening across 16 of the 21 industrial sectors covered in the survey.

Production moved into expansion territory, with the output index rising to 50.4, while the new-orders index climbed to 50.6. The stronger order numbers indicate that demand conditions improved during the month.

Domestic demand showed a noticeable recovery, while overseas orders also strengthened. Better export demand could provide an additional boost to manufacturers and support industrial activity in the months ahead.

Policy measures aimed at encouraging consumption and investment also contributed to the improvement. Faster progress on major infrastructure projects and stronger public investment helped support economic activity and create additional demand for industrial products.

However, extreme weather, including high temperatures, typhoons and heavy rainfall, continued to disrupt production in some regions. These factors kept the overall PMI below the expansion threshold.

Despite the challenges, the August figures offer a more encouraging picture for China’s manufacturing industry. Rising production and new orders suggest that the sector is gradually regaining momentum.

A sustained recovery will depend on whether stronger domestic consumption and overseas demand continue in the coming months. For manufacturers, maintaining production growth and responding to improving demand will remain key to turning the recent improvement into a broader and more durable recovery.