BEIJING — Chinese manufacturing activity ticked up slightly in September yet the country’s purchasing manager’s index, or PMI, is still at levels indicating contraction in the sector.
China’s official PMI was at 49.8 last month, up from 49.7 in August, the country’s statistics bureau said Thursday. Figures below 50 indicate contraction. Last week, financial information service provider Markit, in partnership with Caixin Media Co., released a flash PMI of 47 for the month, a six-and-a-half year low. Caixin China has since readjusted its preliminary estimates for September to a PMI of 47.2 for the month.
Markit said the latest data shows the quickest deterioration in operating conditions faced by Chinese manufacturers since March 2009, and attributed the decline partly to a steeper fall in new export business. Markit added that staff numbers fell at the quickest pace since the beginning of 2009.
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With Thursday marking the start of China’s National Holiday, a seven-day reprieve from work also known as “Golden Week,” and a period during which millions of consumers take advantage of sales and other promotions, the slight uptick could be attributed to more orders placed ahead of the vacation. Data from China’s statistics bureau showed that the manufacturing of consumer goods, like food and liquor, improved in September, attributing the boost to holidays falling both at the end of the month and in October.
Yet while economists say the uptick could indicate a slight recovery, many say they are not optimistic about a quick recovery.
The “pressure driving the sector’s decline has eased,” He Fan, chief economist with Caixin Insight Group, said in a research note. “The industry has reached a crucial stage in its structural transformation. Tepid demand is a main factor behind the oversupply of manufacturing and why it has not recovered.”
Zhao Qinghe, a statistician with China’s National Bureau of Statistics, said in a research note that September’s PMI is “still below the critical point, indicating that external demand is still weak and downward pressure on manufacturing is still large.”