The preliminary purchasing managers index (PMI) for Chinese manufacturing issued by the Hong Kong and Shanghai Banking Corporation (HSBC) has improved slightly to 47.8 in September from the final August reading of 47.6. A reading below 50 indicates a contraction and with the preliminary September reading, the index stayed below 50 for the eleventh consecutive month.
“China’s manufacturing growth is still slowing down, but the pace of slowdown is stabilizing. Manufacturing activities remain lackluster, thanks to weak new business flows and a longer than expected destocking process. This is adding more pressure to the labor market and has prompted to step up easing over the past weeks. The recent easing measures should be working to lead to a modest improvement from the fourth quarter onwards.” said HSBC chief economist for China Qu Hongbin in a statement.