China Sept. manufacturing activity continues expanding
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E-mail Xinhua, October 1, 2014
Chinese manufacturing activity continued to expand in September while manufacturers' operating conditions saw no improvement against the previous month amid subdued growth momentum, official data showed on Wednesday.
The manufacturing purchasing manager's index (PMI), a key measure of factory activity in China, posted at 51.1 in September, unchanged from August's reading, according to the data released by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP).
A reading above 50 indicates expansion, while a reading below 50 represents contraction. The NBS manufacturing PMI samples 3,000 enterprises of various sizes nationwide.
"The September PMI remains above the 50 threshold and indicates no change to the basic trend of steady economic growth in the future," said Zhang Liqun, an economist at the Development Research Center of the State Council.
The rise of the production sub-index suggested a rebound in industrial growth last month, he said.
The retreat in the indices for new orders, finished goods inventory, purchase quantity and raw material purchase prices indicates continuous de-stocking activities and low confidence among enterprises, suggesting that the Chinese economy still faces downward pressure, Zhang said.
Among the PMI sub-indices, the NBS said, the production sub-index posted at 53.6, up 0.4 percentage point from August, and was the second-highest reading this year, led only by a 54.2 reading in July.
The sub-index for new export orders rose 0.2 percentage point from the previous month to 50.2. The new orders index lost 0.3 percentage point to 52.2 in September.
NBS statistician Zhao Qinghe said the data showed that overseas demand continued to grow last month, but at a slower pace.
Zhao expected new export orders to continue rising in the fourth quarter thanks to the Western holiday season.
Chen Zhongtao, a CFLP analyst, said the sub-indices for new orders and production in cement and railway transportation equipment industries rose notably, suggesting potentially more contributions to economic growth from infrastructure investment.
The NBS data also showed that the finished goods inventory index posted at 47.2 in September, down 0.9 percentage point month on month, after rising for three consecutive months.
In addition, the index for production and business activity expectations dropped 1.9 percentage points month on month to 56 in September.
In terms of the size of the surveyed enterprises, the PMI of large-sized manufacturers posted at 52 in September, up 0.1 percentage point from August. That of medium-sized enterprises was at the threshold reading of 50, also up 0.1 percentage point month on month.
The PMI for small-sized manufacturers registered at 48.6, down 0.5 percentage point from the previous month, and has remained in contraction territory for two consecutive months, the data showed.
NBS statistician Zhao said the drop suggested that small manufacturers still face significant difficulties during economic restructuring.
He advised firmer execution of targeted macro control policies, which aim to help small- and micro-sized enterprises.
The HSBC/Markit China manufacturing PMI, which samples 420 small- and medium-sized manufacturing enterprises, posted at 50.2 in September, also unchanged from August's three-month low.
The PMI signaled only fractional improvement in the health of the sector, data company Markit said Tuesday in a statement.
Overall, the HSBC/Markit data in September suggest that China's manufacturing activity continues to expand at a slow pace, said HSBC chief China economist Qu Hongbin.
"We think risks to growth are still on the downside and warrant more accommodative monetary as well as fiscal policies," Qu said.
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