The three major indexes rebounded simultaneously to release positive signals for economic performance – Interpretation of September PMI data
Xinhua News Agency, Beijing – In a positive development for China’s economic performance, all three major indexes, namely the manufacturing purchasing managers index (PMI), the non-manufacturing business activity index, and the comprehensive PMI output index, have rebounded in September. The data released by the Service Industry Survey Center of the National Bureau of Statistics and the China Federation of Logistics and Purchasing on September 30 highlighted the improvement in economic operations and the accumulation of policy effects.
According to the data, the manufacturing PMI reached 50.2%, entering the expansion range for the first time since April. Among the 21 industries surveyed, 11 industries had a PMI above the critical point, indicating an increase in manufacturing boom and an expansion in coverage. Market demand has shown gradual recovery, leading to an acceleration of manufacturing production activities. The manufacturing production index and new orders index rose to 52.7% and 50.5%, respectively. To meet the production needs, companies increased their purchasing efforts, leading to a rise in the purchasing volume index to 50.7%.
The recovery in market supply and demand, coupled with increased corporate purchasing activities, has resulted in a rise in manufacturing market prices. The purchase price index and ex-factory price index of major raw materials reached 59.4% and 53.5%, respectively, marking the highest levels this year.
Key industries like equipment manufacturing, high-tech manufacturing, and consumer goods industries have also experienced rebounding PMIs. Sun Yang, brand manager of Suzhou Ruijiu Intelligent Technology Co., Ltd., reported that the sales of their floor scrubbers and vacuum cleaners have rebounded significantly, indicating strong market prospects.
Additionally, business expectations for production and operating activities remained stable at a good level, with an expectation index of 55.5% in September. However, the survey also revealed challenges faced by the manufacturing industry, such as intensified industry competition, high raw material costs, and financial constraints. To consolidate the economic recovery, experts emphasized the need to implement introduced policies and measures.
In the non-manufacturing industry, the non-manufacturing business activity index rose to 51.7%, indicating an increased expansion. The service industry witnessed booming business activity, with an index of 50.9%, and an acceleration in the expansion of the construction industry was observed, with a business activity index of 56.2%.
The overall production and operation activities of Chinese enterprises rebounded, as indicated by the comprehensive PMI output index of 52%. Industry analysts noted that this rebound in the PMI reflects significant positive changes in China’s economic operation and an increase in endogenous power and social expectations.
This positive development in China’s economic recovery is evident with the increase in passenger traffic during the Mid-Autumn Festival and National Day holidays, growth in national fruit road freight volume, and better-than-expected sales in supermarkets during the holidays. Despite the downward fluctuations in the global economy and the challenging external environment, China’s economy has remained resilient and continues to be an important engine for global economic growth.
Cong Liang, deputy director of the National Development and Reform Commission, expressed confidence in the long-term rebound and improvement of China’s economy. With the implementation and accumulation of existing and incremental policies, the country’s economy is expected to further recover.
In line with this positive outlook, the Organization for Economic Cooperation and Development predicts that while the global economic growth rate in 2023 and 2024 will be 3.0% and 2.7% respectively, China’s economic growth rate will be 5.1% and 4.6% respectively.
As China’s economy shows signs of rebounding, it is set to play a crucial role in driving global growth and lifting the world economy out of the current challenges it faces.