A key manufacturing index shows Chinese export orders in September fell at their sharpest rate in 42 months, suggesting “manufacturing growth is likely to be bottoming out.”
HSBC’s survey of purchasing managers in September rose to 47.9 from 47.6 in August. Although the index slight improved last month, it was still the 11th straight month in which the index was below 50, the line between manufacturing contraction and expansion. HSBC’s index surveys senior purchasing managers at more than 430 Chinese companies.
"Manufacturing activities remain lackluster thanks to weak new business flows and a longer-than-expected destocking process." said Qu Hongbin, HSBC's chief economist for Greater China and co-head of Asian Economic Research.
He said Beijing should ramp up efforts to boost growth in light of the decline of “new export orders and the lingering pressures on job markets.” The government’s recent efforts to boost the economy should begin to take hold in the fourth quarter, Hongbin said.
The index reveals a slightly less healthy manufacturing sector than that of the Chinese government’s own manufacturing index. The official purchasing managers’ index, put out by the National Bureau of Statistics and the China Federation of Logistics and Purchasing, rose to 49.8 percent in September from 49.2 in August, according to Chinese media.