Positive sign from China factory activity
REBOUND CONTINUES: Purchasing Managers’ Index came in at 50.4 in Sept
MANUFACTURING activity in China continued its rebound last month on improving production and demand, government data showed on Saturday — a positive sign for the world’s second-largest economy.
The official Purchasing Managers’ Index (PMI) came in at 50.4 last month — exactly the same level as in August, which was its highest since October 2014 — figures from the National Bureau of Statistics (NBS) showed.
A figure above 50 signals expanding activity, while anything below demonstrates shrinkage. Investors closely watch the PMI readings, which gauge conditions at Chinese factories and mines, as the first indicator of the health of the economy each month.
The figure was up from July’s 49.9 and compared to the median forecast of 50.5 in a Bloomberg News survey of economists.
After August’s unexpected surge, some experts had expected a deceleration. But heavy rain and flooding in the south and centre of the country have fuelled a surge in demand as reconstruction work gets under way.
The manufacturing sector has also been supported by a rise in the property market, with prices of new apartments up some 40 per cent year-on-year in some cities and 25 per cent, here, which boosted demand for construction materials, furniture and appliances.
China’s key manufacturing sector has been struggling in the face of sagging global demand for Chinese products and excess industrial capacity left over from the country’s infrastructure boom.
But Saturday’s data add to evidence of improvement as government fiscal support and the soaring property market help underpin growth.
Fresh signs of stability may lead policymakers to remain on hold after keeping their benchmark rate at a record low for almost a year.
China is a vital driver of global growth, but its economy expanded only 6.9 per cent last year — its weakest rate in a quarter of a century — and has slowed further this year.
Beijing has said it wants to reorient the economy away from one relying on debt-fuelled investment and towards a consumer-driven model, but the transition has proven challenging. AFP