Mixed Signals in China’s September PMI: Manufacturing Shows Resilience, Services Cool

With a six-month high of 49.8 in September, China's official Manufacturing PMI showed slight improvement yet stayed below 50, therefore implying contraction. Encouragingly, production rose to 51.9 and export orders reached their highest since March at 47.8. Falling ex-factory prices, nevertheless, continued to weaken pricing ability, falling for the 16th consecutive month into contraction. With employment reaching a seven-month high of 48.5, workforce statistics also demonstrated some promise.

Private sector data from RatingDog, on the other hand, showed greater growth with its Manufacturing PMI reaching 51.2, indicating expansion and the quickest rise since March. A minor rebound in export orders and great production growth drove this. Rising input prices and falling output prices exacerbated margin pressures, yet called into question future job stability in the industry.

Meanwhile, non-manufacturing activity slowed, the index dropping to a neutral 50.0 to reflect a cooling in construction and services, and the worst performance since November 2024. Showing negligible growth, China's composite PMI overall increased to 50.6. These confusing signals highlight the difficulties China's economy is under as outside trade pressures and weak domestic demand persist despite cries for more stimulus.