China's September Manufacturing PMI at 49.8... Sixth Consecutive Month of Contraction

Longest Slump Since 2019

China's manufacturing activity has remained in contraction for the sixth consecutive month, marking the longest slump since 2019.

On September 30, the National Bureau of Statistics of China announced that the manufacturing Purchasing Managers' Index (PMI) for September was recorded at 49.8, up 0.4 points from the previous month's 49.4.

A clothing factory in Guangzhou, Guangdong Province, China. Photo by Reuters and Yonhap News Agency

This figure exceeds the median economist forecasts compiled by Reuters and Bloomberg, which stood at 49.6, but still falls short of the baseline of 50.

The PMI is based on surveys of corporate purchasing managers and indicates business trends in the relevant sector. A figure above 50 signals expansion, while below 50 indicates contraction.

China's manufacturing PMI has remained below 50 for six consecutive months since April (49.0). Bloomberg reported that this is the longest period of contraction since 2019.

By company size, the PMI for large enterprises in September rose by 0.2 points to 51.0, while the PMI for medium-sized enterprises fell by 0.1 points to 48.8. The PMI for small enterprises increased by 1.6 points to 48.2, but still remains in contraction territory.

Of the five major sub-indices that make up the manufacturing PMI, the production index (51.9, up 1.1 points from the previous month) and the supplier delivery index (50.8, up 0.3 points) surpassed the baseline. However, the new orders index (49.7, up 0.2 points), raw material inventory index (48.5, up 0.5 points), and employment index (48.5, up 0.6 points) all remained in contraction.

The non-manufacturing PMI, which covers construction and services, fell by 0.3 points from the previous month to 50.0. The construction business activity index rose by 0.2 points to 49.3, while the services business activity index dropped by 0.4 points to 50.1.

Michelle Lam, Greater China Economist at Societe Generale, commented, "Overall, the PMI data suggests a slight improvement in September after a weak summer," but added, "However, as the impact of tariffs becomes increasingly evident and the effect of consumption subsidies wanes, growth prospects will remain challenging."

Meanwhile, a separate survey released on the same day by private Chinese research firm Ruitinggou (Rating Dog) and S&P Global showed China's September manufacturing PMI at 51.2, up 0.7 points from the previous month's 50.5. The services PMI edged down slightly to 52.9 from 53.0.

This index, previously published by Chinese financial information provider Caixin and S&P Global, is considered to better reflect the business trends of private, export-oriented, and small to medium-sized enterprises compared to the official PMI announced by the National Bureau of Statistics.

This content was produced with the assistance of AI translation services.