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China’s manufacturing activity rises in September

Purchasing Managers Index reaches six-month high.

China’s Manufacturing Purchasing Managers Index (PMI), which measures manufacturing activities in the country, grew to 51.2 in September 2013 from 50.1 in August, marking the six-month high.

The rise in PMI was primarily due to improvement in external and domestic demand conditions, according to a survey by conducted by research firm Markit and HSBC.

A PMI of above 50 indicates an expansion in manufacturing/industrial activity, and below hints at contraction. The improvement in manufacturing activity shows signs of improvement in the world’s second-largest economy.

Hongbin Qu, chief economist of China & Co and head of Asian economic research at HSBC said: “The HSBC Flash China Manufacturing PMI rose to a six-month high in September, adding further evidence to China’s ongoing growth rebound.

“We expect a more sustained recovery as the further filtering - through of fine - tuning measures should lift domestic demand. This will create more favourable conditions to push forward reforms, which should in turn boost mid- and long-term growth outlooks.”

PMI is a composite index based on five of the individual indexes with weight of 0.3 for new orders, 0.25 for output, 0.2 for employment, 0.15 for suppliers’ delivery times, and 0.1 for stock of items purchased.

In addition, China’s Manufacturing Output Index also grew to 51.1 in September 2013 from 50.9 last month, marking the five-month high.

Data for the survey was collected between 12 and 19 September 2013.