China’s manufacturing sector logged a strong momentum in September driven by robust domestic and foreign demand after the easing of lockdown measures, survey data from IHS Markit showed Wednesday.
The Caixin manufacturing Purchasing Managers’ Index edged down to 53.0 in September from 53.1 in August.
A score above 50 indicates expansion in the sector. Operating conditions strengthened in each of the past five months.
According to the official survey data released by the National Bureau of Statistics, the factory PMI advanced to 51.5 in September from 51.0 in August. Likewise, the non-manufacturing PMI came in at 55.9 versus 55.2 in August.
New orders grew the most since the start of 2011 driven by robust external demand, private survey data revealed. New export business rose at the quickest pace since August 2017.
Manufacturers said higher inflow of work led them to raise production in September though the pace of growth softened.
Employment levels were broadly stable, which brought about an end to a period of job shedding that stretched back to January.
Manufacturers raised their purchasing activity again in September, and at the fastest rate since January 2011. Cost inflation quickened from August but output charges increased at the slowest pace for three months.
Chinese manufacturers were generally confident that production would rise over the next 12 months. Notably, the degree of positive sentiment improved to a three-month high.
The strength of the manufacturing sector will take some of the pressure off policymakers going forward, Wang Zhe, senior economist at Caixin Insight Group said.
“However, the job market remains worrisome, as the improvement in employment relies on a longer-term economic recovery and a more stable external environment. In the near future, great uncertainties remain about the overseas pandemic and the U.S. presidential election,” said Wang.
In the near term, fiscal support and improving foreign demand will keep activity in industry and construction strong, which in turn should shore up consumer sentiment and household spending, Julian Evans-Pritchard, an economist at Capital Economics, said.
“The upshot is that we are entering a period of above trend growth, which should help absorb the remaining slack in the labour market and allow for some policy tightening next year,” the economist added.
For comments and feedback contact: email@example.com
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.