China's manufacturing PMI (Purchasing Managers' Index) data shows that the sector contracted for an 11th straight month in September, as factories faced weak demand and hard-to-sell stocks.

The Flash China Manufacturing PMI at 47.8 (47.6 in August) slightly improved in the month while the Flash China Manufacturing Output Index at 47.0 (48.2 in August) fell to a 10-month low.

The HSBC Flash China Manufacturing PMI is published on a monthly basis approximately one week before final PMI data are released, making the HSBC PMI the earliest available indicator of manufacturing sector operating conditions in China. The estimate is typically based on approximately 85%–90% of total PMI survey responses each month and is designed to provide an accurate indication of the final PMI data.

Hongbin Qu, chief economist, China & co-head of Asian Economic Research at HSBC said:  “China’s manufacturing growth is still slowing, but the pace of slowdown is stabilising. Manufacturing activities remain lacklustre, thanks to weak new business flows and a longer than expected destocking process. And this is adding more pressures to the labour market and has prompted Beijing to step up easing over the past weeks. The recent easing measures should be working to lead to a modest improvement from 4Q onwards.”

The HSBC China Report on Manufacturing is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 420 manufacturing companies.

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