Chinese manufacturing activity contracts in Sept

PanARMENIAN.Net - Chinese manufacturing activity contracted for a second straight month in September, though indicators also pointed to stabilizing conditions from lows reached in August, according to a government survey released Monday, Oct 1, according to MarketWatch.

The official Purchasing Managers’ Index, released by the National Bureau of Statistics along with the China Federation of Logistics and Purchasing, printed at 49.8 on a 100-point scale, compared to 49.2 in August.

SocGen economist Yao Wei said in a note following the PMI release that she saw “some green shoots” in Monday’s data, as readings for four of the six major sub indexes showed “clear signs of recovery.”

Nomura analysts said the data offered a snapshot of an economy poised to improve in the fourth quarter, noting that September’s reading marked the first month-on-month rise since May.

China’s GDP would likely accelerate to an annualized 8.8% growth in the fourth quarter, up from a forecast 7.6% in the third, the Japanese brokerage said.

Companies seeking to replenish depleted inventories could be a big factor in the improving-orders environment, it added.

Bank of America-Merrill Lynch said it expected China’s export growth to remain in the low single digits or close to zero—representing improvements from conditions earlier in the year.

“This might mean that at least the worsening in external demand is being moderated,” Merrill Lynch analysts said.

Employment, however, ranked among the soft spots in the report, easing to 48.9 in September from 49.1 in August.

Monday’s PMI data follow the final reading of a privately-compiled survey by HSBC over the weekend, which showed manufacturing activity contracting for the 11th straight month in September.