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China factory activity extends slump for 5th straight month, official data shows

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China factory activity extends slump for 5th straight month, official data shows

Chinese manufacturing activity contracted for the fifth month in a row in September amid a continued slowdown in new export orders data from the National Bureau of Statistics showed.

The official purchasing managers' index ticked up to 49.8 in September from 49.5 in August, but remained below the 50-point mark that separates expansion from contraction. The consensus estimate of economists polled by Econoday was for a reading of 49.6.

Total new orders returned to growth after four months of decline, though new export orders continued to fall.

Meanwhile, a survey compiled by Caixin and IHS Markit showed that Chinese manufacturing activity unexpectedly improved this month as production and total new orders grew at faster rates.

The seasonally adjusted Caixin China General Manufacturing PMI rose to 51.4 in September from 50.4 in the prior month, its sharpest increase since February. The reading also exceeded the Econoday consensus estimate of 50.0.

The increase was attributed to new orders, which grew at the fastest pace since March on the strength of domestic demand. New work from abroad declined again but at a slower rate as the U.S.-China trade rift remained unresolved.

The slight improvement in the official and and private-survey data signals that factory activity "got a break from the ongoing slowdown," wrote Julian Evans-Pritchard and Martin Lynge Rasmussen, economists at Capital Economics, in a note.

"But this is unlikely to mark the start of a turnaround," they said, adding that global demand's weakness is likely to persist.