China manufacturing output modestly expands in September, signals a gradual economic recovery

Manufacturing output in the world’s second-largest economy modestly expanded during the month of September, barely exceeding the 50-point neutral mark and signaling a gradual economic recovery after a prolonged period of instability.

The seasonally adjusted Purchasing Managers’ Index (PM) rose only slightly from the no-change mark of 50.0 in August to 50.1 in September. Although this signalled only a fractional improvement in the health of the sector, it was only the second time the headline index had posted in positive territory since February 2015, data released by Markit showed Friday.

Chinese manufacturers continued to signal growth in new work during September. The rate of expansion remained marginal, however, despite quickening slightly from the previous month. Encouragingly, new business from abroad remained broadly stable in September, ending a nine-month sequence of reduction.

Further, purchasing activity increased in September, although the rate of growth was little-changed from August and remained modest overall. Consequently, stocks of purchased items rose slightly over the month. At the same time, relatively muted growth in new work contributed to a further accumulation of inventories of finished goods, the data showed.

Moreover, manufacturing employment in China continued its downward trend in September. Though the rate of job shedding weakened to its slowest in nine months, it remained marked overall. Consequently, stocks of purchased items rose slightly over the month. At the same time, relatively muted growth in new work contributed to a further accumulation of inventories of finished goods.