MANUFACTURING output in China shrunk at the fastest rate in 10 months, as the sector was hit by numerous worldwide headwinds, a survey revealed yesterday.
The Chinese manufacturing industry continued to slump in September, the purchasing managers’ index business survey showed, though at a slower rate than in August.
But the output sub-index hit a 10-month low of 47 – well under the 50 value that indicates no change – according to the data, released by Markit and HSBC.
And though the overall index increased to 47.8, from 47.6 last month, this also indicates substantial contraction.
“China’s manufacturing growth is still slowing, but the pace of slowdown is stabilising,” said Hongbin Qu, chief HSBC economist in China.
“Manufacturing activities remain lacklustre, thanks to weak new business flows and a longer than expected destocking process,” he added.
Qu went on to predict that this index, showing a worsening climate for the manufacturing industry, would add weight to the calls for further fiscal or monetary easing from Beijing.
Qu also forecasted that current easing efforts would have a positive impact on the economy, but this would take until the fourth quarter to feed in.