China PMI Continues Modest Rise in September

China’s Purchasing Managers’ Index (PMI) rose to 51.2 in September from 50.9 in August, according to the China Federation of Logistics and Purchasing (CFLP). The second consecutive monthly rise suggests economic growth is stabilizing at a level that makes a hard landing unlikely.

The CFLP figure contradicts the 49.9 figure published Friday by HSBC which remained unchanged from the figure for August. The difference between the two figures is due to the fact that CFLP surveys mostly state-owned enterprises while the HSBC survey includes more small and mid-sized enterprises.

In September nine of 20 industries had PMI over 50, including tobacco, medicine and transport equipment. Nonferrous metals was at 50 while 10 other industries, including ferrous metals, general equipment, paper-making and printing, were below 50.

Sub-indices of the PMI show uncertainties in the export sector and negative outlooks for small and mid-sized enterprises.

The PMI measures manufacturing activity, with an above-50 reading suggesting contraction from the previous month and an above-50 showing expansion. Since May China’s PMI had declined for four consecutive months, hitting a low of 50.7 percent in July before rebounding to 50.9 percent in August.

The CFLP is based on a survey of purchasing managers in more than 820 companies across 20 industries. The sub-index for input prices fell to 56.6 percent, indicating an easing of cost pressures. But demand size growth is shows some slowing in general with a high possibility of slowing export growth.

The sub-index for new orders in September rebounded slightly to 51.3 while the output sub-index rose 52.7. The sub-index for new export orders rebounded a substantial 2.6 points to 50.9.

The global PMI has continued to decline since March. In August it stood at only 50.1 percent, its lowest since June 2009, reflecting weak global economic recovery.