Sep 30 2024, 09:40
China’s factory activity contracted for a fifth straight month in September, a further sign of economic weakness that highlights the urgency for Beijing’s stimulus blitz.
The official manufacturing purchasing managers’ index was 49.8, below the 50-mark separating growth from shrinkage, the National Bureau of Statistics said Monday. That was better than economists’ median forecast of 49.4 but it meant the sector was in contraction during all but three months since April 2023.
“The overall level of manufacturing market prices continued to fall due to lack of effective demand, but the decline narrowed,” senior NBS statistician Zhao Qinghe said in a statement, citing modestly improved prices for major raw materials.
The non-manufacturing measure of activity in construction and services fell to 50 from 50.3 last month, the statistics office said, comparing with a forecast of 50.4.
The PMI surveys show the economy remained in a slump before Chinese officials announced a broad package of stimulus measures aimed at reviving growth. Last week, the central bank cut key interest rates and freed up cash for banks to boost lending, while the elite Politburo pledged to support fiscal spending and stabilize the beleaguered property sector.
The unusual pace and intensity of the efforts reflected policymakers’ urgency and boosted investor sentiment, with Chinese stocks capping their biggest weekly rally since 2008 on Friday.
The pessimism was palpable before the stimulus announcements, with Chinese consumer confidence falling in August to the lowest level since November 2022.
Adding to the dire picture, an exporter-oriented private gauge showed the country’s manufacturing activity unexpectedly fell into contraction in September.
The Caixin China manufacturing purchasing managers’ index fell to 49.3 in the month from 50.4 in August, according to a statement released by Caixin and S&P Global on Monday. While services were a relative bright spot, the Caixin PMI for the sector shows expansion weakened to 50.3 from 51.6 last month, the slowest in a year.
Source: Bloomberg
