September HSBC Flash China Manufacturing PMI Still Contracting But Above August Level

The HSBC Flash China Manufacturing PMI (Purchasing Managers' Index) hit 47.8 in September, which was above the 47.6 level in August. But, a PMI number below 50 still means manufacturing activity is contracting in China. Markets in Asia are selling off on the news. The Shanghai Composite is down 1.10% at 2,045 and Japan's Nikkei 225 is down 1.44% at 9,099.

From Markit Economics:

Key points:
  • Flash China Manufacturing PMI™ at 47.8 (47.6 in August). 2-month high. 
  • „Flash China Manufacturing Output Index at 47.0 (48.2 in August). 10-month low.

Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & CoHead of Asian Economic Research at HSBC said:

“China’s manufacturing growth is still slowing, but the pace of slowdown is stabilising. Manufacturing activities remain lacklustre, thanks to weak new business flows and a longer than expected destocking process. And this is adding more pressures to the labour market and has prompted Beijing to step up easing over the past weeks. The recent easing measures should be working to lead to a modest improvement from 4Q onwards.”
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