China’s factory activity contracts – September

The manufacturing measures reflect sluggish domestic demand and uncertainties over trade tensions with the United States.China’s factory activity shrank for a sixth straight month in September, the longest slump since 2019, an official report said.

The official manufacturing purchasing managers index, or PMI, improved to 49.8 from 49.4 in August. But it remained below the 50-cutoff level between contraction and expansion on a scale of 0 to 100.

A private sector PMI survey by the credit research and rating startup RatingDog was more upbeat, with September’s overall PMI rising to 51.2 from 50.5 in August.

The mixed manufacturing measures reflect persisting sluggish domestic demand and uncertainties over trade tensions with the United States.

More detailed data measuring new orders and production saw month-on-month improvements.

“The September PMI reads from China offered a picture that looked less like a coherent growth engine and more like a car with one cylinder firing while another misfires,” Stephen Innes of SPI Asset Management said in a commentary.

Companies are under pressure from price cutting amid rough competition, he said.

“Factories are moving more goods, but they’re being forced to do it at thinner margins, like street vendors selling more bowls of noodles at half price just to keep the crowd coming,” Innes said.

Source: EuroNews