(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
Key Insights
- 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.”
Get More
- 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
©2020 Bloomberg L.P.
Advertisement