The manufacturing sector in China entered a contraction phase in September, according to the latest survey results from Caixin released on Monday, which reported a manufacturing PMI of 49.3.
This figure is down from 50.4 in August, falling below the critical threshold of 50 that delineates expansion from contraction.
New orders for Chinese manufactured goods decreased at the swiftest rate since September 2022, driven by declining underlying demand, heightened competition, and subdued market conditions, as noted by the survey respondents. This decline also extended to export orders, as weakening economic conditions abroad adversely impacted foreign demand. Specifically, firms in the investment goods sector experienced the sharpest reduction in overall new business.
The survey further indicated that the services PMI registered 50.3, down from 51.6 in August.
Incoming new business for Chinese service firms rose for the twenty-first consecutive month in September, reflecting improved underlying demand conditions. New product launches were frequently cited as key factors supporting the increased demand. However, the rate of expansion slowed to its lowest point in nearly a year.
