Improvement in China's manufacturing PMI suggests near-term stabilization

Data released by the National Bureau of Statistics (NBS) on Saturday showed that China's official Purchasing Managers' Index (PMI) stood at 50.4 in September, unchanged from August, while the non-manufacturing PMI increased to 53.7 from the previous month's 53.5.

The manufacturing sub-index for production moved up to 52.8 from 52.6 in August, rising for the second consecutive month. The index for new orders was slightly down from the previous month, but remained in expansionary territory. The non-manufacturing sub-index for new orders rose to 51.4 in September, its highest level in 2016, indicating demand in the sector is picking up.

Data followed Caixin manufacturing PMI data on Friday, a private gauge of manufacturing activity, which showed the index was in expansionary territory for the second time since February 2015. China September private Caixin manufacturing PMI was in line with expectations at 50.1 vs 50.0 in August.

NBS statistician Zhao Qinghe said both production and demand showed signs of stabilization in the manufacturing sector, while the non-manufacturing sector is gradually picking up steam as enterprise confidence builds strength.