Factory activity in China improved slightly in September, according to official data published Wednesday, showing a small rebound in the economy ahead of the week-long National Day public holiday.
The closely watched Purchasing Managers’ Index (PMI) is a key gauge of manufacturing activity in the world’s second-largest economy, which has largely bounced back after plunging in February because of tough coronavirus measures.
In September, the PMI figure increased slightly to 51.5 after slipping to 51.0 in the previous month. Any figure above the 50-point mark represents growth while below it signals a contraction.
Zhao Qinghe, a senior statistician at the National Bureau of Statistics (NBS), said that this month’s figures, with increases in several key indices, demonstrated a “steady recovery” and a pre-holiday consumption boom.
But Zhao also noted that some industries, such as apparel, textile and wood processing, reported insufficient market demand.
“We also see that, although overall manufacturing demand has increased, industrial recovery is uneven… the global pandemic has not been fully and effectively controlled, and there are still uncertain factors in China’s imports and exports,” he said.
In February, the index plunged to 35.7 points after the coronavirus brought much of China to a standstill.
Non-manufacturing PMI came in at 55.9 points — an increase of 0.7 percentage points from August, showing further signs of an economic rebound.
This month’s new export order index and import index were both positive for the first time, at 50.8 percent and 50.4 percent respectively — a rise of 1.7 and 1.4 percentage points from August.
Chinese business media group Caixin noted that “new business expanded at the strongest rate since January 2011” and employment stabilised in the manufacturing sector, while the easing of lockdown measures contributed to the momentum of recovery.
But the Caixin manufacturing PMI edged down from 53.1 last month to 53.0 in September.
The Caixin PMI mainly surveys SMEs, and is seen by some as a more accurate reflection of the economic situation than the official government figure, which more closely reflects the condition of large state groups.
“The latest PMIs show that economic activity continued to accelerate in September on the back of a broad-based improvement in both services and manufacturing,” wrote Julian Evans-Pritchard, senior China economist at Capital Economics, in a note.
“In the near term, we think 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.”
Business indices in the official measure for industries including railway transportation, air transport, catering and telecommunications were at 60 percent or above.