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The HSBC Flash Manufacturing Purchasing Managers’ Index (PMI) for September rose to 51.2, the highest level since April and up from 50.1 in August, according to figures released by HSBC on Monday.
An index figure above 50 signals expansion, while below 50 indicates contraction.
Qu Hongbin, Chief Economist of HSBC China, said the country’s manufacturing sectors are being boosted by rising external demand and micro stimulus policies at home.
“We expect a more sustained recovery as the further filtering-through of fine-tuning measures should lift domestic demand,” Qu said.
The HSBC report showed that output and new orders including new export orders rose in September.
New export orders jumped to a ten-month peak of 50.8, up sharply from August’s 47.2, said the HSBC report.
That suggested restocking is part of the driver of the current economic recovery, according to Xiaojia Zhi and Ting Lu, China economists from Bank of America Merrill Lynch, in a report.
The Flash 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 Flash PMI is based on a survey of purchasing executives in Chinese companies.