Free Trial

China CFLP Sep Manufacturing PMI Surges to Highest in 5 Years

--Official Mfg PMI Above 50 For 14th Consecutive Month
--Official Services PMI Rose to 55.4 from 53.4 in Aug
     BEIJING (MNI) - PMI data released Thursday by the China Federation of
Logistics and Purchasing:
           Manufacturing PMI  Services PMI
September               52.4          55.4
August                  51.7          53.4
     Note: Readings above 50 indicate expansion in the sector, while readings
below 50 signal contraction. The higher the PMI reading above 50, the faster the
expansion in the sector. The lower the reading below 50, the faster the
     --Manufacturing new orders index rose to 54.8 in Sept. from 53.1 in Aug.
     --Manufacturing production index rose to 54.7 in Sept. from 54.1 in Aug
     --Input price index rose to 68.4 in Sept. from 65.3 in Aug.
     --Business expectations index fell to 59.4 in Sept. from 59.5 in Aug.
     --New export orders rose to 51.3 in Sept. from 50.4 in Aug.
     TAKEAWAYS: The official China manufacturing purchasing managers index
(PMI), jointly released by the China Federation of Logistics and Purchasing
(CFLP) and the National Bureau of Statistics, rose to 52.4 in September from
51.7 in August. The index was the highest level since April 2012, when it was
     The surge in the Sept. manufacturing PMI was unexpected, with the median
forecast of an MNI survey showing an expectation that the index would ease back
to 51.6. The September reading was the 14th consecutive month manufacturing
sentiment has been above the 50-point mark, which divides expansion from
contraction. And this was also the 12th consecutive month that the index has
been above the 51-point market. 
     The main forces contributing to the rise were input and output prices.
Input prices accelerated to 68.4, the highest reading this year, jumping from
65.3 in August. Output price rose to 59.4, also the highest reading this year,
from 57.4 in August. 
     The gap between input and out prices continued to expand to nine percentage
points from the previous 7.9 points, indicating rising prices of raw materials
are squeezing company profits. 
     "Over 40 percent of manufacturers complained about the higher cost due to
the rising prices of raw materials, particularly middle- and
downstream-companies," Zhao Qinghe, economist with the NBS said in a separate
     The main sub-indexes that make up the PMI showed positive momentum in
September. Production rose 0.6 percentage point to 54.7, while  overall new
orders rose 1.7 percentage points to 54.8, due to further improvements in
demand, the NBS said. The new orders index was the highest in five years. 
     "New order growth has exceeded the increase in production this year,
showing that the demand-supply relationship has trends toward further balance,"
Zhao said.
     The exports order index rose to 51.3 from 50.4 in August, the second
highest level this year. The imports sub-index fell slightly to 51.1, 0.3
percentage point lower than last month. 
     Manufacturers' confidence about the future eased in September but remained
at a high level. The business expectations sub-index fell to 59.4 from 59.5 but
was still the second highest this year.
     Among the other 13 sub-indexes that make up the PMI manufacturing index,
raw material inventories, finished good inventories, orders on hand, supplier
delivery times and employment were all below 50, the point that separates
expansion from contraction.
     The inventories of finished products continued to decelerate to 44.2 from
45.5 in August, the fifth months consecutive fall.
     The raw material inventories index inched up to 48.9 from 48.3 in August as
the manufacturers added stocks of production inputs on the rise in new orders
and growth in prices.  
     The employment index also dipped to 49.0 from August's 49.1.
     By enterprise size, business activity among big manufacturers expanded at a
faster rate, with the index rising to 53.8, up 0.1 percentage point from August.
Sentiment among medium-size manufacturers increased 0.1 percentage points to
51.1, and that among small ones rose 0.3 percentage points to 49.4, according to
the NBS statement.
     "The domestic base for good, stable economic momentum has been forged and
positive drivers have taken the leading force," said Chen Zhongtao, an economist
with the CFLP. "The good trend is expected to continue next quarter."
     However, the rising prices of raw materials, particularly in the energy
sector due to the government's environmental protection campaign, is still
putting pressures on manufacturers, Chen warned. 
     In addition, the volatility of the exchange rate has increased trading
risks, Chen said. "13.4 percent of companies have mentioned the problem during
our survey, 2.6 percentage points higher than in August."
     The CFLP services PMI rose in September to 55.4 from 53.4 in August, back
above the 54 mark. 
     The CFLP attributed the growth to robust new orders and higher input
     "The increasing demand will continue to boost the growth of the service
sector, particularly when it is approaching the long [National Day] holiday,"
said Wu Wei, an economist with CFLP.
--MNI Beijing Bureau; +86 (10) 8532 5998; email:
--MNI BEIJING Bureau; +1 202-371-2121; email:

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.