China final September HSBC PMI steady on firmer global demand but risks remain
BEIJING (Reuters) - China's vast factory sector showed signs of steadying in September as export orders climbed, a private survey showed on Tuesday, easing fears of a hard landing but pointing to a still-sluggish economy facing considerable risks.
The final HSBC/Markit Manufacturing Purchasing Managers' Index(PMI) hovered at 50.2 in September, unchanged from the August reading which was a three-month low, but lower than a preliminary reading of 50.5.
A sub-index measuring new export orders, a gauge of external demand, expanded to a 4-1/2-year-high of 54.5, though domestic demand appeared soft. The 50 mark separates expansion from contraction in activity on a monthly basis.
More worrisome, the survey showed further weakness in the job market, with the sub-index for manufacturing employment shrinking for the 11th consecutive month, which is bound to concern China's Communist leaders.
The world's second-largest economy has stumbled this year as a slowdown in the housing market further weighs on softening domestic demand.
With the property market expected to cool further, economists believe policymakers will have to roll out more stimulus measures in coming months to meet the government's 2014 growth target of around 7.5 percent.
"Overall, the data in September suggests that manufacturing activity continues to expand at a slow pace," said Qu Hongbin, chief economist for China at HSBC.
"We think the risks to growth are still on the downside and warrant more accommodative monetary as well as fiscal policies."
Despite the strong surge in export orders, the overall output level fell to its lowest in four months, but managed to hold above the 50-point level. Continued...