China Manufacturing PMI Expands After Three Months... Slow Recovery Below Expectations

[Image source=EPA Yonhap News]

[Asia Economy Beijing=Special Correspondent Kim Hyunjung] The official indicator representing China's manufacturing sector has emerged from contraction after three months. However, private sector indicators still fail to surpass the threshold, indicating a slower-than-expected economic recovery.

On the 30th, China's National Bureau of Statistics announced that the September Manufacturing Purchasing Managers' Index (PMI) rose by 0.7 points from the previous month (49.4) to 50.1. This figure not only exceeded experts' forecast of 49.6 but also surpassed the baseline (50) for the first time in three months since July, signaling an end to contraction. The PMI is a leading indicator of manufacturing activity; a reading above 50 indicates expansion, while below 50 indicates contraction.

The Non-Manufacturing PMI for September, released on the same day, recorded 50.6, down 2.0 points from the previous month (52.6). This figure fell short of experts' forecast, which anticipated stability. The Non-Manufacturing PMI has been gradually approaching the 50 mark, recording 54.7 in May, 53.8 in July, and 52.6 in August.

The private sector indicators reflected the ongoing contraction. The September manufacturing PMI released by Caixin, a local economic media outlet in collaboration with market research firm IHS, deteriorated to 48.1 from 49.5 in the previous month. This figure not only missed the forecast (49.5) but also marked the lowest level since May. The Caixin PMI mainly surveys small and medium-sized enterprises, resulting in some differences compared to the official indicators, which focus more on large state-owned enterprises.