China: PMI improves in September
October 1, 2011
Manufacturing continued to show resilience in September, which suggests stability in the sector and alleviates concerns of a hard economic landing. The Purchasing Managers' Index (PMI) published by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFPL) rose to 51.2 points in September, which was up from 50.9 points in August and slightly above market expectations that had the index rising to 51.1 points. The monthly reading marked the second consecutive improvement after four straight months of decline. With the September improvement, the index moved further above the 50-point threshold that separates expansion and contraction. The improvement observed in September was broad-based as 9 out of the 11 sub-categories of the index recorded gains over the previous month, particularly the sub-index of export orders, which returned to expansion with a 2.6 point increase over the previous month. Production output, which accounts for a quarter of the total PMI, grew by 0.4 points compared with the previous month. In addition, the sub-gauge of input prices declined 0.6 points, which suggests that cost pressures on businesses have somewhat eased.