News & Reports News Year 2011 October , 2011 Second rise for economic index

Second rise for economic index

CHINA'S Purchasing Managers' Index continued to rise in September to 51.2 percent, the China Federation of Logistics and Purchasing said at the weekend.
The CFLP report noted that the 0.3 percentage-point increase over August marks a two-month rise, indicating that economic development is continuing to stabilize and that the worries of a hard economic landing are being eased.

But sub-indices of the PMI show that uncertainties remain in the export sector and prospects for small and mid-sized enterprises are gloomy.
The PMI is a gauge of manufacturing expansion. A reading below 50 indicates contraction from the previous month, while a reading above 50 indicates expansion.
China's PMI had declined for four consecutive months, hitting a low of 50.7 percent in July before rebounding to 50.9 percent in August.
The manufacturing index from the logistics federation is based on a survey of purchasing managers in more than 820 companies across 20 industries.
In September, nine of the 20 industries, including tobacco, medicine and transport equipment, saw a PMI of over 50 percent; nonferrous metals stood at 50 percent; while 10 other industries, including ferrous metals, general equipment and printing, were below 50 percent.
Zhang Liqun, a researcher with the Development Research Center of the State Council, or China's Cabinet, said the slight recovery of September's PMI indicates a higher possibility for stabilized economic growth.
The sub-index for input prices fell 0.6 percentage points to 56.6 percent, indicating that cost pressures on enterprises have somewhat eased, Zhang said.
But he said the growth speed on the demand side is showing a downward trend and a high possibility of dwindling export growth.
It is still highly possible that the economic growth rate will continue to decline in the future.
He said small and mid-sized enterprises face great difficulties and need stronger policy support.

The sub-index for new orders in September rebounded slightly, inching up 0.2 percentage points to 51.3 percent, while the output sub-index rose 0.4 percentage points to 52.7 percent.