With China’s Purchasing Managers’ Index (PMI) for October due out on Thursday, analysts are predicting that the sector will not perform well over the northern winter.
As the Epoch Times reports, China’s final September PMI reading released by HSBC was 50.2. This was one per cent lower than flash estimate and only slightly higher than the August final value of 50.1.
A PMI index over 50 corresponds to an expansion when compared to the previous month, while a reading below 50 indicates a contraction.
“The September HSBC China Manufacturing PMI edged up slightly from August,” Hongbing Qu, chief economist for Greater China at HSBC, said in a press release.
“New orders remained flat from the previous month, while external demand improved. Manufacturers restocking process continued but remained relatively slow.”
According to China’s finance.sina.com.cn, Yu Song, a Beijing-based Goldman Sachs economist, the downward adjustment of the September figure from the flash estimate suggests that the recovery of China’s manufacturing sector may slow in the coming quarters.
This view is reinforced by a newly released report on China’s manufacturing industry by Financial Consulting firm Deloitte.
According to the report, China’s industries, such as textile and apparel equipment, commercial trucks, construction machinery, ship building, and heavy machinery are being affected by economic downturn, overcapacity, and lack of core competitiveness.