China September official PMI seen hitting 17-month high

Fri Sep 27, 2013 4:02am EDT
 
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BEIJING (Reuters) - China's factory activity is forecast to have expanded at its fastest rate in 17 months in September, a Reuters poll showed, reinforcing signs of a turnaround in the world's second-largest economy as both domestic and external demand improve.

The official manufacturing purchasing managers' index (PMI) is forecast to rise to 51.5 in September from August's 51, according to the median estimate of 14 economists. If realised, it would be the highest reading since April 2012.

A reading above 50 indicates expanding activity while one below it points to a contraction.

A preliminary private PMI survey by HSBC/Markit released this week showed the factory sector grew at its fastest pace in six months in September.

The official PMI, which is weighted more towards bigger and state-owned companies, generally paints a rosier picture than the private survey, which focuses more on smaller and private sector firms.

"With the help of a recovering global economy and government's pro-growth measures being effectively implemented, the rebounding trend in the manufacturing sector seen in August is expected to continue in September," said Nie Wen, an analyst at Hwabao Trust in Shanghai.

Beijing has stepped up efforts to prevent a sharp economic slowdown by quickening railway investment and public housing construction and introducing measures to help smaller companies.

Recent data has shown some of the impact of those policies, with factory output in August hitting a 17-month high and retail sales growing at their fastest pace this year.

Profits earned by industrial firms rose 24.2 percent in August from a year earlier, more than double the growth rate in July, data showed on Friday.   Continued...