MNI DATA BRIEF: China PMI Contracts First Time In 19 Months

The China Purchasing Managers' Index (PMI) slid to 49.6 in September from 50.1 in August, falling into contraction for the first time in 19 months, driven by slower production and consumption, data from the National Bureau of Statistics on Thursday showed.

Market demand weakened as new Covid-19 cases impacted business, with the new order sub-index sliding to 49.3 from 49.6. New export orders also eased 0.5 pps to 46.2 on higher transporting costs. The production sub-index, gauging the supply end, fell to 49.5, also the first within the year due the shortage of critical raw materials as well as domestic restrictions on high energy consuming factories.

The non-manufacturing service index bounced back quickly from lockdowns in some cities to 53.2 from the previous 47.5.

The business activity expectation index stood at 58.9, 1.6 percentage points higher than last month, reflecting an optimistic outlook towards service sector. Business activity index of the construction industry was 57.5, still staying in a relatively high boom range, reflecting the rapid growth of construction industry production, the NBS said.

The private Caixin manufacturing PMI for September came in at 50.0, the line between expansion and contraction, and up from 49.2 last month.