China's official manufacturing PMI remains in contraction territory
China’s official manufacturing PMI was in contraction territory again in September, according to data released by the National Bureau of Statistics on Monday.
The official purchasing managers’ index for the manufacturing sector rose to 49.8 in September from 49.5 in August, beating expectations for an unchanged reading but remaining in contraction territory for the fifth month in a row.
Meanwhile, the non-manufacturing PMI fell to 53.7 in September from 53.8 the month before, while the composite PMI - which measures activity in both the services and manufacturing sectors - edged up to 53.1 from 53.0.
A private survey of the country’s manufacturing activity hit its highest level since January 2018. The Caixin/Markit factory PMI came in at 51.4 for September, up from 50.4 in August and ahead of expectations of 50.2.
Caixin/Markit said the improvement was mostly due to firmer domestic demand as foreign sales continued to be hit by the Sino-US trade spat.
Pantheon Macroeconomics said: "Overall, these data continue to point to some green shoots, but we aren’t getting carried away, and neither will the authorities. In any case, the possible private sector recovery hasn’t been enough to lift the whole economy, and hasn’t translated into capex yet."
Capital Economics said: "China’s official and unofficial PMIs rose in September, but we think this is unlikely to mark an economic turnaround not least because global demand looks set to weaken further.
"All told, we suspect that the September PMI data are a bit of a false dawn, particularly as the fiscal stance is unlikely to be loosened in the final quarter of the year. This is a key reason why we expect most industrial metals prices to ease back in the coming months."