China's manufacturing sector has returned to an expansion phase after two months.
The National Bureau of Statistics of China announced on September 30 that the manufacturing Purchasing Managers' Index (PMI) for September recorded 50.1. This marks a 0.3-point increase from the previous month's 49.8, breaking free from two consecutive months below the baseline. A PMI above 50 indicates expansion, while below 50 signifies contraction.
The manufacturing PMI in China rose to 50.4 in March this year but fell to 50.3 in April, 50.0 in May, and 50.3 in June, before dropping to 49.2 in July and 49.8 in August.
In September, a notable recovery was observed in the production sector. The production index increased by 1.3 points to 51.7 compared to the previous month. The new orders index, which reflects companies' new orders, stood at 50.5, slightly below the previous month by 0.1 points. Export-related demand remained stable, with the new export orders index at 50.0, down 0.1 points from the previous month, placing it on the border between expansion and contraction. The import index improved by 0.6 points to 49.2 but remained below the baseline.
On the price front, pressures from rising raw material prices intensified. The raw material purchase price index surged by 4.2 points to 60.8, while the product output price index rose by 3.6 points to 54.0. Employment conditions, however, worsened, with the manufacturing employment index dropping by 0.3 points to 48.4, indicating a contraction in employment conditions. The future production and business activity expectation index remained unchanged at 53.8 from the previous month.
The non-manufacturing sector, which includes services and construction, also showed improvement. The non-manufacturing business activity index for September rose by 1.2 points to 50.2. The construction sector increased by 3.4 points to 50.3, while the services sector rose by 0.9 points to 50.2.
According to Reuters, the normalization of factory operations following the alleviation of production disruptions due to adverse weather, along with demand from the global AI industry, has supported China's industrial sector. However, the ongoing contraction in manufacturing employment and the performance of small and medium-sized enterprises remain critical factors to monitor for the sustainability of China's economic recovery.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.