Activity in China's manufacturing sector contracted in September to the lowest since the coronavirus outbreak in February 2020, due to the country's vigorous restrictions on energy-guzzling sectors to lower energy use and emissions, but the services sector bounced back strongly.
The Purchasing Managers' Index (PMI) for the manufacturing sector dropped to 49.6 in September from 50.1 a month earlier, data from the National Bureau of Statistics (NBS) showed.
The 50-point threshold separates the sector from expansion to contraction. The lower the reading is below 50, the faster the pace of contraction.
But the official non-manufacturing PMI, which gauges the performance in services and construction industries, increased to 53.2 in September from 47.5 in August, with restaurants, cinemas, airports, and railway stations, etc. recovering from the impact of the pandemic reappeared in August.
Zhao Qinghe, a senior NBS statistician, said businesses at high energy-consuming industries were hit and drove down the manufacturing PMI to below the threshold. "From the perspective of market expectations, enterprises are optimistic about the recent recovery of the service market."
A shortage of coal and record high coal prices triggered widespread curbs on electricity usage in at least 20 provinces and regions. Higher raw material prices, especially of metals and semiconductors, have also pressured profits of manufacturers. Earnings at China's industrial firms in August slowed for the sixth straight month.
A sub-index for raw material costs rose to 63.5 in September from 61.3 a month earlier, while a gauge of new orders came in at 49.3 compared with 49.6 in August, shrinking for the second straight month.
(Writing by Alex Guo Editing by Harry Huo)
For any questions, please contact us by inquiry@fwenergy.com or +86-351-7219322.