China Caixin Manufacturing PMI Slides to 49.3 in September

Manufacturing sector activity saw its sharpest decline since July 2023.
Manufacturers reported a renewed fall in new orders, which fell at the fastest pace since September 2022.
New export orders also declined.
Falling orders led to the first fall in the volume of unfinished work since February 2024.
Manufacturers reduced headcounts amid cost concerns and the current pullback in demand.
Input prices declined alongside falling orders, with firms also reducing factory gate prices amidst an increasingly competitive environment.
Confidence across manufacturing firms fell to the second lowest level since records began in April 2012.

Key Takeaways from the September Survey

The unexpected contraction across China’s manufacturing sector emphasized the need for government stimulus and central bank policy measures to bolster the economy.

Last week, the People’s Bank of China and the Politburo announced measures to support the ailing Chinese economy. Expectations of a boost in consumption limited the impact of the September PMI numbers on market risk sentiment.

Investors will need to assess the effectiveness of the latest policy measures in economic indicators for Q4 2024.

Expert Views on China’s Manufacturing Sector

Dr. Wang Zhe, Senior Economist at Caixin Insight Group, commented on the September Survey, stating,

“Across the board, the latest macroeconomic data have fallen short of market expectations. The issue of insufficient effective domestic demand remains prominent, with significant pressure on employment and weak optimism constraining people’s willingness and ability to spend.”

Dr. Zhe also remarked on the recent policy measures to bolster the Chinese economy, saying,