China’s Manufacturing Activity Picks Up in September as Supply Chain Delays Raged On

Source: IHS Markit.

China’s general manufacturing PMI improved in September, supported by a renewed upturn in total sales and a softer reduction in output. CSI 300 Index up +0.67%, CNY USD up +0.14%

• The headline seasonally adjusted Purchasing Managers’ Index (PMI) improved from 49.2 in August to 50.0 in September.
• The improvement signaled that business conditions stabilized at the end of Q3, after a slight decline in the previous month, but the latest reading was still the 2^nd-lowest posted in the last 17 months.
• The latest PMI data indicated that business conditions across China’s manufacturing sector stabilized in September, after a slight slowdown in August.
• At the same time, China’s purchasing activity also rebounded to growth, while confidence towards the year ahead also strengthened.
• Supply chain delays carried on amid sustained reports of material shortages that triggered sharper increases in input costs and output prices.
• Inflationary pressures increased in September, with the average input costs increasing significantly. 
• The rate of inflation rose at the quickest pace in four months as energy and material costs increased.