The seasonally adjusted Purchasing Managers’ Index (PMI) rose only slightly from the no-change mark of 50.0 in August to 50.1 in September. Although this signalled only a fractional improvement in the health of the sector, it was only the second time the headline index had posted in positive territory since February 2015.

Chinese manufacturers continued to signal growth in new work during September. The rate of expansion remained marginal.

Key Points

  • Total new business rises marginally, as new export work stabilises
  • Job shedding eases but remains marked
  • Inflationary pressures show signs of picking up

Commenting on the China General Manufacturing PMI data:
Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said: “The Caixin China General Manufacturing PMI for September edged up slightly from the August level to 50.1, above the neutral 50-point level separating expansion from contraction.

The index readings for new orders and stocks of purchases improved from the previous month while the reading for output slipped, but remained in expansion territory. The readings for the manufacturing PMI over the past three months seem to indicate that the economy has begun to stabilize. But given that the growth rate of fiscal income has slowed recently while expenditures have swung, there is insufficient momentum to drive future economic growth, and there is a risk that industrial output may decline.”