China factory activity shrinks for second month

The Caixin China Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in more than 400 manufacturing companies. The former often have difficulties in securing credit from the state-led banking system. The New Export Orders Index registered 46.5 percent, the same reading as in August.


Meanwhile, staff numbers declined at the quickest rate since the start of 2009. Falling output prices could be one of the reasons for growth in consumer demand, Shah said.

Nonetheless, the region’s growth prospects for the July-September quarter are encouraging.

Chen Zhongtao, analyst with the China Logistics Information Center, observed that manufacturing firms accelerated in reducing their stock of goods in September. September marked the third consecutive month of slower growth in manufacturing employment.

Supporting the overall improvement in operating conditions was a marked increase in new orders.

The price index fell 1 point to 38.0, indicating that raw materials prices have decreased for the 11th consecutive month. Input costs decreased for the second month running in September, a situation not seen since the financial crisis.

Any figure above 50 separates growth from contraction.

The outlook was lower than the 47.3 reading in August, but higher than the predicted 47, according to the outlook from Caixin and Markit, issued on Thursday.

September data pointed to the weakest rise in production since May 2014, with the slowdown reported across the three broad areas of the manufacturing economy. As a result, buying activity at South Korean goods producers fell at a softer pace.

Still, the steady loss of momentum in developing and emerging countries in recent months leaves the U.S. as the lone bright spot in the global economy and will raise questions about whether its central bank should risk raising interest rates this year for the first time in almost a decade.


The U.S. Labor Department also released a report on Thursday showing claims for US unemployment benefits rose by more than expected in the week ended September 26th.

China factory activity shrinks for second month