China final Caixin factory PMI falls to six-and-a-half year low of 47.2 in September
BEIJING, (Reuters) - China's factory activity shrank by the most in over six years in September as new orders fell, a private survey showed on Thursday, suggesting economic conditions were still deteriorating despite a raft of government stimulus measures.
The final Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) edged down to 47.2 in September, the lowest reading since March 2009.
That was little changed from August's 47.3 but up a touch from a preliminary reading of 47.0.
Factory activity in China has now shrunk for seven straight months. Levels below 50 signify a contraction.
Pointing to further weakness ahead, new export orders fell at a faster rate, sliding to 44.6 - a low not seen since March 2009 - and well below August's 46.6.
Demand at home also remained sluggish. The overall new orders sub-index, which covers domestic and export orders, contracted to its lowest level since August 2012.
With sales weakening, manufacturers shed jobs for the 23rd month in a row and at the fastest pace since January 2009.
The survey also showed persistent deflationary pressure as the economy softens, putting more strains on companies.
While prices of raw materials weakened further, in line with weak global commodity markets, factories' profit margins likely shrank as they were forced to discount their products more deeply to clinch sales.
Despite a long series of stimulus measures, including slashing interest rates five times since November, recent data suggested China's economy lost further momentum over the summer.
A plunge in China's stock market and a surprise devaluation in the yuan (CNY=CFXS) have roiled global markets, and raised doubts inside and outside China over Beijing's ability to manage its economy.
Weighed down by a property downturn, factory overcapacity and high levels of local debt, China's economic growth is expected to slow to a quarter-century low of around 7 percent this year.
Some economists believe current growth levels are already much lower than the official numbers suggest.
Reporting By Xiaoyi Shao and Kevin Yao; Editing by Kim Coghill
Contact info: xiaoyi.shao@thomsonreuters.com; +8610-66271221; Reuters Messaging: xiaoyi.shao.thomsonreuters.com@reuters.net
