Factory gate prices in China fell the least since 2012 last month, signalling continued improvement in conditions for the country’s manufacturers as consumer prices rose less than expected.

The official producer price index saw its softest fall since April 2012, contracting only 0.8 per cent year on year and performing markedly better than the drop of 1.8 per cent seen in July, according to the National Bureau of Statistics. The figure was largely in line with a median forecast of -0.9 per cent.

In month-on-month terms producer prices rose 0.2 per cent for the second month running. The annualised contractions in the extraction and raw materials categories were the sharpest at levels of -3.2 per cent and -2.3 per cent, respectively. But a headline figure for producer prices of daily necessities showed no change, neither rising nor falling as prices for food, clothing and daily necessities all saw expansion.