Tags: China | factory | growth | slows

China Factory Gauge Falls From Initial Reading as Growth Slows

Monday, 29 September 2014 10:48 PM

A Chinese manufacturing gauge fell from an initial reading a week ago as a property slump weighs on the world’s second-largest economy.

The Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics for September was at 50.2, lower than the flash reading of 50.5 and unchanged from August. Numbers above 50 signal expansion.

Weaker-than-expected industrial profits, output and credit have spurred economists to cut estimates for this year’s gross domestic product growth. One bright spot in data for August, export growth, was reflected in today’s report, which showed a stronger expansion of total new business, driven by the biggest rise in new export work for four-and-a-half years.

China’s trade surplus climbed to a record in August as exports rose on the back of increased shipments to the U.S. and Europe. That’s helping offset the drag from property: new-home prices fell in all except two of the 70 cities monitored by the government last month, the most since January 2011.

A separate manufacturing index from the National Bureau of Statistics and China Federation of Logistics and Purchasing is scheduled to be published on Wednesday. That figure declined to 51.1 in August from 51.7 in July. The median estimate of 31 economists surveyed by Bloomberg is 51.0.

A report this month showed the economy remained stuck in “low gear” this quarter. The China Beige Book showed growth in investment slowed further, borrowing costs rose and the share of firms applying for and getting bank loans remained at “rock bottom levels.”

The government has set an expansion target of about 7.5 percent for this year. Premier Li Keqiang and other policy makers have insisted for months they don’t need strong measures to aid growth.

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A Chinese manufacturing gauge fell from an initial reading a week ago as a property slump weighs on the world's second-largest economy.
China, factory, growth, slows
Monday, 29 September 2014 10:48 PM
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