China power crisis weighs on manufacturing activity, drops to lowest level since coronavirus outbreak

The official manufacturing purchasing managers’ index (PMI) – a survey of sentiment among factory owners – fell to 49.6 in September, from 50.1 in August

China’s official non-manufacturing PMI – which measures morale in the services and construction sectors – rose to 53.2 in September

3-MIN READ3-MIN

China’s official non-manufacturing purchasing managers’ index (PMI) – which measures morale in the services and construction sectors – bounced back to 53.2 in September

Published: 9:08am, 30 Sep 2021Updated: 4:00pm, 30 Sep 2021

Activity in China’s manufacturing sector contracted in September due to “low sentiment of high energy-consuming industries”, data released on Thursday showed, but the services sector bounced back strongly from coronavirus outbreaks last month.

The official manufacturing purchasing managers’ index (PMI) – a survey of sentiment among factory owners – fell to 49.6 in September from 50.1 in August, data from the National Bureau of Statistics (NBS) showed.

The figure was below the median forecast of a Bloomberg survey of analysts, which had predicted a fall to 50, as the index dropped to its lowest level since the start of the coronavirus pandemic in February 2020.

A reading above 50 indicates growth in sector activity, while a reading below the mark represents contraction. The lower the reading is below 50, the faster the pace of contraction.

In September, due to the low sentiment of high energy-consuming industries, the manufacturing PMI fell to below the threshold

Zhao Qinghe

But the official non-manufacturing PMI – which measures morale in the services and construction sectors – rose to 53.2 in September, from 47.5 in August. The increase was driven by a rise in the services index from 45.2 to 52.4. The construction index, though, dropped to 57.5 in September from 60.5.

The figure was above expectations in the Bloomberg survey, which had predicted a rise to 49.8, as activity in the railway transport, air transport, accommodation, catering, ecological protection and environmental control sectors all recovered having been impacted coronavirus outbreaks in August.

“In September, due to the low sentiment of high energy-consuming industries, the manufacturing PMI fell to below the threshold. But looking from the sentiment perspective, among the 21 surveyed sectors, there were 12 above the threshold, two more than last month, and most manufacturing sectors expanded from last month,” said senior NBS statistician Zhao Qinghe.