(Bloomberg) -- An official gauge of activity in China’s manufacturing sector gained in September on stronger production and orders, suggesting the recovery momentum remained solid, while activity in the services sector also strengthened.
- The manufacturing purchasing managers’ index in September rose to 51.5 from 51 a month earlier, according to data released by the National Bureau of Statistics Wednesday, beating the 51.3 estimate in a Bloomberg survey
- The non-manufacturing gauge rose to 55.9 from August’s 55.2. That’s better than the median forecast of 54.7. Readings above 50 indicate improving conditions from the previous month
- The steady improvement in the industrial sector should have benefited from rising operation rates and strong exports as overseas re-opening continues. Consumption also started to pick up as more restrictions were lifted on traveling and visiting entertainment venues.
- However, the recovery is still highly uneven, with an over-reliance on property, infrastructure and exports. A set of early indicators showed China’s economic rebound flattened out in September, weighed down by lackluster home and car sales, a weaker stock market and worsening business confidence. That signals China’s recovery momentum could further fade if consumption fails to provide enough support.
- “We think the overall production momentum should be largely intact,” Citigroup Inc. economists, led by Johanna Chua, wrote in a report before the data release. “Improved public health conditions would support new orders, in which new export orders may also remain resilient as major trading partners continue to reopen.”
- A sub-index of new export orders for factories climbed to 50.8, the first time it’s been in expansion territory this year. New orders was also higher at 52.8
- A sub-index of manufacturing employment rose slightly to 49.6, while non-manufacturing employment quickened to 49.1
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