Sun, Oct 02, 2016 - Page 16 News List

Chinese factory activity expands again, survey shows

Reuters, BEIJING

Activity in China’s manufacturing sector expanded again last month, an official survey showed yesterday, which might indicate that recent positive momentum can be sustained.

The official Purchasing Managers’ Index (PMI) stood at 50.4 last month, identical with the previous month’s level. A reading above 50 shows growth on a monthly basis.

In an encouraging sign, new export orders increased last month, rising to 50.1 from the previous month’s 49.7, while output edged up to 52.8 from 52.6 in August.

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 Chinese 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 might pose increased risks later this year with debt levels continuing to rise.

A similar official survey showed activity in China’s services sector expanded at a slightly faster pace, with the official reading up from 53.5 in August to 53.7 last month.

A measure of the construction industry rose as the government has gone on an infrastructure spending spree. The services employment sub-index rose last month, but still indicated services companies were cutting staff.

A private business showed on Friday that factory activity expanded, but the improvement was marginal and manufacturers continued to shed jobs.

The Caixin/Markit Manufacturing Purchasing Managers’ index for last month rose to 50.1 from a no-change level of 50 in August.

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