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China's Caixin manufacturing PMI drops in September

Xinhua | Updated: 2017-09-30 11:11

BEIJING — Manufacturing activities at smaller Chinese enterprises continued to expand in September, but at a slightly weaker rate, a private survey showed on Saturday.

The Caixin China General Manufacturing Purchase Managers' Index (PMI) stood at 51 for September, down from a six-month high of 51.6 in August, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media Co Ltd.

This was in contrast to the official manufacturing PMI reading of 52.4, the highest level since May 2012, which indicated that China's manufacturing sector expanded at a faster pace this month.

The official PMI samples 3,000 manufacturing enterprises in China, while the Caixin PMI samples some 500 manufacturers and is relatively volatile due to its small sample size and less emphasis on large enterprises.

A reading above 50 indicates expansion, while a reading below reflects contraction.

"While some panelists commented that improved market conditions had helped to lift sales, other firms mentioned that subdued client demand had weighed on growth," said a Caixin report, suggesting that production and new orders expanded at softer rates.

At the same time, inflationary pressures picked up, with average input costs and output prices both rising sharply, it said.

China's producer price index (PPI), which measures costs of goods at the factory gate, rose 6.3 percent year-on-year in August, 0.8 percentage points higher than the July level.

But manufacturers remained optimistic that output would increase over the next year, though the degree of optimism has weakened slightly since August, the report showed.

"The Chinese economy was stable in the third quarter. But the outstanding price pressure from upstream industries will be a drag on the continued improvement of companies' profitability," said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin Insight Group.


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