China factory activity expands again in September: official PMI

Fri Sep 30, 2016 11:03pm EDT
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BEIJING (Reuters) - Activity in China's manufacturing sector expanded again in September, an official survey showed on Saturday, which may indicate that recent positive momentum can be sustained.

The official Purchasing Managers' Index (PMI) stood at 50.4 in September, identical with the previous month's level. A reading above 50.0 shows growth on a monthly basis.

September's 50.4 reading matched the prediction of a Reuters poll.

After a significant pick-up in March, China's official PMI slipped, falling below 50 in July before showing expansion in August.

In an encouraging sign, new export orders increased in September, rising to 50.1 from the previous month's 49.7.

In September, output edged up to 52.8 from 52.6 in August, but the index for total new orders slipped to 50.9 from 51.3.

A sub-index for smaller firms fell, while performance at larger companies improved, a sign that the government's dependence on big state firms for growth this year has not changed.

Economists say the pattern over the past few months suggested sustained economic growth, but a growing dependence on government spending and an overheated property market may pose increased risks later this year with debt levels continuing to rise.

Industrial profits rose at the fastest pace in three years in August, with rising sales and higher prices stimulated by a construction boom and heated property market.   Continued...

An employee works on an assembly line producing automobiles at a factory in Qingdao, Shandong Province, China, March 1, 2016. REUTERS/Stringer