BEIJING—A gauge of manufacturing activity in China rose slightly in September but remained in contractionary territory for the 11th consecutive month, indicating that the world's second-largest economy is still slowing.
The HSBC China Manufacturing Purchasing Managers' Index rose to a final reading of 47.9, compared with a preliminary reading of 47.8 announced last week, and a final reading of 47.6 for August, HSBC Holdings HSBA.LN -1.07% PLC said Saturday.
A reading below 50 indicates a contraction in manufacturing activity from the previous month, while a reading above 50 indicates expansion.
New export orders fell at the fastest rate since March of 2009, HSBC said, when the global economy was still reeling from the financial crisis.
The export orders reading indicates that economic weakness in major export markets such as the U.S. and Europe is continuing to have an impact on China.
"A number of firms reported that demand had weakened amongst key trading partners due to a tough economic environment," HSBC said.
"Chinese manufacturing growth is likely to be bottoming out. However, the sharper contraction of new export orders and the lingering pressures on job markets mean that Beijing should step up easing to support growth and employment," HSBC's chief economist for China, Qu Hongbin, said in a statement.
The sub-index reading on employment indicated that workforce numbers at manufacturing firms fell in September, though at a more mild pace than in the previous two months.
Nearly 85% of survey respondents reported no change to their staff levels, while 8% said they had cut staff, HSBC said.
China has taken a series of measures over the past several months to support growth, but many economists say the government's reaction to the slowdown has been less intense than expected, possibly due to fear of a rebound in inflation or property prices.
In the most recent move, the General Administration of Customs on Friday announced a series of measures to stimulate trade growth, including scrapping some customs charges and simplifying procedures for trade companies.
Market participants will now turn their attention to a competing purchasing managers index released by the government, to be announced on Monday.
That measure has been more positive than the HSBC PMI for several months.
Economists say this is because it is weighted more heavily toward large, state-owned firms, which have suffered less impact in the current slowdown than private exporters, which are more heavily represented in HSBC's index.
Still, the official PMI also fell into contractionary territory in August, for the first time since November.
wsj.com
The HSBC China Manufacturing Purchasing Managers' Index rose to a final reading of 47.9, compared with a preliminary reading of 47.8 announced last week, and a final reading of 47.6 for August, HSBC Holdings HSBA.LN -1.07% PLC said Saturday.
A reading below 50 indicates a contraction in manufacturing activity from the previous month, while a reading above 50 indicates expansion.
New export orders fell at the fastest rate since March of 2009, HSBC said, when the global economy was still reeling from the financial crisis.
The export orders reading indicates that economic weakness in major export markets such as the U.S. and Europe is continuing to have an impact on China.
"A number of firms reported that demand had weakened amongst key trading partners due to a tough economic environment," HSBC said.
"Chinese manufacturing growth is likely to be bottoming out. However, the sharper contraction of new export orders and the lingering pressures on job markets mean that Beijing should step up easing to support growth and employment," HSBC's chief economist for China, Qu Hongbin, said in a statement.
The sub-index reading on employment indicated that workforce numbers at manufacturing firms fell in September, though at a more mild pace than in the previous two months.
Nearly 85% of survey respondents reported no change to their staff levels, while 8% said they had cut staff, HSBC said.
China has taken a series of measures over the past several months to support growth, but many economists say the government's reaction to the slowdown has been less intense than expected, possibly due to fear of a rebound in inflation or property prices.
In the most recent move, the General Administration of Customs on Friday announced a series of measures to stimulate trade growth, including scrapping some customs charges and simplifying procedures for trade companies.
Market participants will now turn their attention to a competing purchasing managers index released by the government, to be announced on Monday.
That measure has been more positive than the HSBC PMI for several months.
Economists say this is because it is weighted more heavily toward large, state-owned firms, which have suffered less impact in the current slowdown than private exporters, which are more heavily represented in HSBC's index.
Still, the official PMI also fell into contractionary territory in August, for the first time since November.
wsj.com
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