Manufacturing activity in China slowed slightly last month, official figures showed yesterday, as the world’s second-largest economy stabilizes.
The official purchasing managers’ index (PMI), which gauges conditions at factories and mines, came in at 51.4 last month, down from 51.7 the previous month which marked its fastest growth for two years.
A figure above 50 marks an expansion of manufacturing activity and below 50 a contraction.
The key manufacturing sector had been struggling in the face of sagging world demand for Chinese products and excess industrial capacity left over from the country’s infrastructure boom.
However, an upturn in the housing and construction markets thanks to cheap credit — following a series of monetary easing measures — has contributed to a sharp rebound in manufacturing activity.
However, an alternative index calculated independently by the research firm Caixin Insight Group, which focuses on small and medium-sized companies, shows a sharp decline in growth in recent months. Its assessment for last month is to be published next week.
Separately, growth in the services sector last month expanded at a slower pace than in the previous month, an official survey showed yesterday.
The official non-manufacturing PMI stood at 54.5 last month, compared with the previous month’s reading of 54.7, but well above the 50 point mark.
China is counting on growth in services to offset persistent weakness in exports that is dragging on the economy.
The economy expanded at a steady 6.7 percent in the third quarter and looks set to hit Beijing’s full-year growth target, fueled by stronger government spending, record bank lending and a red-hot property market.
Additional reporting by Reuters
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