China's manufacturing activity shrinks for 11th consecutive month
Growth likely to remain tame heading into fourth quarter before improving as mainland's cooling measures take effect, say economists
Manufacturing activity on the mainland shrank for the 11th consecutive month this month, a survey showed yesterday. The fall was but less steep than last month, when the contraction was the sharpest in nine months,
HSBC's preliminary purchasing managers' index, which tracks the mainland's manufacturing businesses, edged up to 47.8 in September from 47.6 in August as new orders continued to fall, albeit at a slower rate. Readings below 50 indicate a contraction.
"China's manufacturing growth is still slowing, but the pace of slowdown is stabilising," HSBC economists Sun Junwei and Qu Hongbin said.
The sluggish manufacturing data suggests industrial output growth will remain tame after hitting a 39-month low of 8.9 per cent last month, they said.
HSBC forecast growth in gross domestic product this quarter will likely "at best" stay similar to the second quarter's 7.6 per cent growth.
Capital Economics forecast a further slowdown in GDP growth to 7.1 per cent this quarter, citing weakness in property and trade.
