China factory activity grows for first time in 6 months in September

90
2
China factory activity grows for first time in 6 months in September

BEIJING - China's factory activity in September has grown for the first time in six months, an official survey showed on Saturday, adding to a run of indicators suggesting the world's second-largest economy has begun to bottom out.

According to the National Bureau of Statistics, the purchasing managers' index rose from 49.7 in September to 50.2, above the 50-point mark, demarcating contraction in activity from expansion. The PMI, the first official data for September, adds to signs of stabilization in the economy, which had sagged following an initial burst of momentum early in the year when China's ultra-restrictive COVID-19 policies were lifted.

In August, preliminary signs of improvement had emerged, with factory output growth and retail sales growth accelerating while declines of exports and imports narrowed and deflationary pressures eased. In August, profits at industrial firms rose 17.2 percent, reversing July's 67% drop.

China's nonmanufacturing PMI, which includes subindices for service sector activity and construction, also rose to 51.7, compared to August's 51.0.

In September, the composite PMI climbed to 52.0 from 51.3, a rise of 51.3.

Near-term data on the radar of economists include consumer spending for the longest public holiday this year. The mid-Autumn Festival will begin on Friday, followed by the National Day break, through Oct. 6.

Policymakers will welcome more reliable economic indicators as they struggle with a property sector debt crisis that has engulfed global markets. The authorities have proposed several measures to shore up the property market, including lowering mortgage rates, although the sector is far from being out of the woods.

In August, new home prices fell the fastest in 10 months and property investment fell for an 18th consecutive month.

The Asian Development Bank last week trimmed its 2023 economic growth forecast for China to 4.9% from a July forecast of 50% due to the weakness in the property sector.

Analysts say more policy support will be needed to ensure China's economy can hit the government's growth target of about 5% this year.

's economy stabilized partly driven by the loosening of property sector policies,' said Zhiwei Zhang, chief economist of Pinpoint Asset Management.