The Chinese energy crisis weighs on manufacturing activity, which falls to the lowest level since the outbreak of the coronavirus epidemic. The Official Manufacturing Purchasing Managers Index (PMI) – which probes industry sentiment – fell to 49.6 in September, from 50.1 in August. China’s official non-manufacturing PMI – which measures services and construction – rose to 53.2, with services offsetting the decline in the real estate sector.
Penalize the realities with high energy consumption
Activity in China’s manufacturing sector contracted in September due to distrust of energy-intensive industries, but the service sector has recovered strongly from the disruption created by the outbreak of new coronavirus cases.
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The Official Manufacturing Purchasing Managers Index (PMI) – a survey on sentiment among Chinese companies – fell to 49.6 in September from 50.1 in August, according to data from China’s National Statistics Institute.
Bloomberg analysts had already predicted a decline below 50, as the index fell to its lowest level since the coronavirus pandemic began in February 2020. A reading above 50 indicates growth in industry activity, while a lower reading represents a contraction. The lower the value below 50, the faster the rate of contraction. In September, due to problems affecting energy-intensive industries, the manufacturing PMI fell well below the threshold.
The construction index is down
But the official non-manufacturing PMI – which measures sentiment in the services and construction sectors – rose to 53.2 in September, from 47.5 in August. The increase was driven by a growth in the index. of services from 45.2 to 52.4. The construction index, on the other hand, fell to 57.5 in September from 60.5.