Chinese manufacturing decelerated further last month, while construction and services grew at a slow rate, according to two surveys yesterday, adding to conflicting signals about whether the country’s slowdown is bottoming out.
HSBC Corp said its purchasing managers’ index (PMI) fell to 47.6 from July’s 49.3 on a 100-point scale on which numbers below 50 represent a contraction. It was the 10th month of decline and the lowest reading since more than three years ago in March 2009.
Manufacturing firms shed jobs at their fastest rate in 41 months, HSBC said. New orders and export orders also declined.
“Beijing must step up policy easing to stabilize growth and foster job market conditions,” HSBC’s China economist, Qu Hongbin (屈宏斌), said in a statement.
The National Bureau of Statistics also announced that its index of non-manufacturing activity rose to 56.3 last month from July’s 55.6. A sub-index for construction activity rose to 61.1 from July’s 60.4. The index also covers industries such as air travel and telecommunications.
China’s economic growth fell to a three-year low of 7.6 percent in the second quarter. Analysts expect a rebound by early next year, but corporate profits and other indicators have fallen despite government stimulus measures.
Weak corporate profits are likely to hurt investment, a key pillar of Beijing’s recovery plan, meaning the government might have to step up its own spending, analysts say.
Beijing has cut interest rates twice since early June and is pumping money into the economy through higher investment by state companies. Chinese Premier Wen Jiabao (溫家寶) and other officials have promised more support for struggling exporters, but there is little Beijing can do to boost foreign demand amid Europe’s debt crisis and a sluggish US recovery.
A separate survey released on Saturday by the government-authorized China Federation of Logistics and Purchasing also showed last month’s manufacturing weakening. The group’s PMI fell to 49.2 points — its lowest level to date — from July’s 50.1.
Chinese shares rose for the first time in four sessions yesterday, helped by strength in the property sector after weaker-than-expected economic data spurred hopes that Beijing would act to stem the slowdown in the world’s second-largest economy.
The CSI300 Index of the top Shanghai and Shenzhen listings closed up 1.1 percent at 2,238.4. The Shanghai Composite Index rose 0.6 percent.